Pod Insights Equity Podcast Figma's IPO success is 'a little bit of a meme stock,' says Sapphire Ventures' Jai Das About this episode Figma managed something rare in today's market: it stayed independent, survived a failed Adobe acquisition, and went public on its own terms. But its post-IPO performance tells a more complex story about startup exits in 2025.
Jai Das, President and Partner at Sapphire Ventures, joined Rebecca Bellan on Equity to discuss what Figma's IPO really signals about the current climate for startup exits. With more than a dozen IPOs under his belt including MuleSoft, Square, and Box, Das broke down Figma's debut, which was 40x oversubscribed and briefly surged to $125 per share before settling closer to $90.
Listen to the full episode to hear:
What Figma's post-IPO stock movement signals to the rest of the market
Why AI exits today focus more on talent than tech and whether that's sustainable
Where Jai sees early promise beyond AI, from defense tech to SpaceTech and crypto infrastructure
Equity will be back Friday with our weekly news roundup, so stay tuned.
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Transcript Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.
0:00 Anthony Ha? This episode of Equity is brought to you by Schneider Electric. Schneider Electric, your energy technology partner.
0:17 Rebecca Bellan? Hello and welcome back to Equity, TechCrunch's flagship podcast about the business of startups. I'm Rebecca Beland and this is the episode where we bring on industry experts to help us explore a trend in the tech world and dive deep. Our regular listeners will know that we've been watching Figma's public debut, a rare example of a startup staying independent and scaling instead of getting scooped up by big tech. Meanwhile, in AI, exits are looking a little different with billion-dollar acqui-hires and talent grabs that are reshaping how startups think about growth and M&A. To dig into it all, I'm joined by Jay Das, president and partner at Sapphire Ventures, who's backed companies like MuleSoft, Square, and Box. Jay, welcome to the show.
0:55 Speaker 02 Thanks, Rebecca. Thanks for having me.
0:57 Rebecca Bellan? Give us a little bit more of your background. How long have you been with Sapphire? And what are some of the main companies that are standouts to you that you've followed over the years?
1:05 Speaker 02 Yeah, so I've been investing for over two decades now, and I'm one of the co-founders. Started out my career as a developer and then went over the dark side, as my colleagues who are still developers and engineers tend to call me. We founded the firm about 15 years ago and over time have scaled it. We started out with five employees and we are almost 100 employees now.
1:27 Rebecca Bellan? Wow.
1:27 Speaker 02 And manage about 10 and a half billion in UAM. We think of ourselves almost as founders because we have built up the firm with the five founding partners to scaled out a growth investment firm. I would say over the years, we have focused mostly on enterprise software. So some of the companies that we have invested, you already mentioned MuleSoft and Box and Square, but also companies like Monday and J-Frog are some of the standout companies in our portfolio.
1:55 Rebecca Bellan? I'm actually curious to hear more about what it's like to start and scale a VC, but maybe we can touch on that towards the end if there's time. What I really want to get into right now is the Figma IPO, which everyone is obsessed over. I mean, it's probably the biggest tech IPO of the year. So Figma, for those who are living under a rock as a design software maker, we've been tracking Figma's progress on the show for a bit now, especially the failed Adobe acquisition in, what was that, 2023?
2:19 Speaker 02 Yes.
2:19 Rebecca Bellan? Do you want to give our listeners a bit of a high level of what happened last week with the IPO? How the stock responded and how it's responding this week?
2:25 Speaker 02 We have been watching Figma actually all the way back when they raised their first series round when they had revenues. And they were the first actual company that got 100x ARR multiple.
2:37 Rebecca Bellan? Wow.
2:37 Speaker 02 I don't think people think that it's that crazy anymore, but their series C was done at, I think, 400 million when they only had like 4 million or so in ARR. Figma has always been a trailblazer, right? Right from the day when Dylan and Evan founded the company and spent four years actually perfecting the tech before they actually made a product and monetized it. But you know, the IPO was actually a blockbuster, right? Like everybody has seen and looked at, like when opened at 33, it went up to like almost 120, 125, and it's now trading down about 90 or so. We always tell our entrepreneurs that you sell on the narrative and then close on the data. Figma is a perfect example of that,
3:19 Speaker 02 where they have the narrative of having a really highly scaled business with all kinds of AI tailwinds behind them. And then when you look at their data, it's astonishing how fast they're growing at scale. I think the only other kind of companies growing at scale faster may be OpenAI and Anthropic, which are kind of almost in another league. But that has what caused so much activity in the stock and the behavior of the public markets in trying to get hold of the stock. I have personally had about 14 IPOs. We have had almost 35 IPOs in the lifetime of the firm. What we have seen is that the real price of the company, of the enterprise value of the company, doesn't really happen till about six months after the IPO,
4:05 Speaker 02 because that is when the lockup expires.
4:07 Rebecca Bellan? Right.
4:07 Speaker 02 That is when all the insiders are able to trade. That is when you have seen two quarters of financials and, you know, results, earnings reports come out. So I would say that the real enterprise value of Figma will probably be apparent only in six months from now.
4:24 Rebecca Bellan? Do you have any predictions? Because this round was massively, what was it, forty times oversubscribed, it soared past the twenty billion that they would have gotten from Adobe.
4:31 Speaker 02 Yeah.
4:31 Rebecca Bellan? What are some of your predictions for the next six months?
4:34 Speaker 02 I don't know if I can predict. I wish if I could, then I know I wouldn't be saying this on air. But you know, I think it all depends on the earnings reports. Because I think when the analysts who were kind of selling the stock to the stock buyers, they had projected like, you know, I think thirty-five percent growth rate this year and twenty-six percent growth rate in FY twenty-six. But when you look back, you know, in the last quarter, I think Figma grew at forty-five percent. So I think the whisper numbers amongst the people who are buying or trading the stock is probably, for their growth rates are probably higher than what is being projected. So I think it's all going to depend on the earnings report for the next two quarters.
5:12 Speaker 02 I think their first quarter earnings report, which comes out, I think in a couple of weeks, is probably going to be really good because they have already everything under control. So it's going to be the second earnings report, right? What they say and really what the guidance is. Because I think, as you see, most stocks actually trade not on backward-looking news, but really depends on the price or the guidance that the company gives for forward-looking growth, right? So I think that's going to be a major, major kind of number that people are going to look at is what is the guidance after the second quarter earnings?
5:46 Rebecca Bellan? Right. So Figma has already been reporting a lot of its financials and it's already shown that it has some impressive numbers. As a product, it rests somewhere in between like Adobe and Canva. It's got a lot going for it in this moment where it's telling an AI story, right? Like, I wouldn't say it's an AI company, but they're actively integrating generated AI features into the design platform using third-party out-of-the-box AI models. So things like visual search, asset search, adding interactions, tools for generating designs and prototypes from text prompts. So a lot of this, I think, is moving in. It's working in its favor to tell the story of why this company is future-focused and future-proof.
6:24 Speaker 02 Yes, you got it right hundred percent because if you look at the largest tech stocks, right? Like Microsoft, Google, Meta, they all came out with earnings reports which were much better than what people had expected. And all of it is driven by AI. And what you're kind of alluding to is the fact that a company that have distribution, a company that have customer love. Once they get some of the AI products in there and distribute to their existing customer base and existing channels. They get a lot of tailwinds. And I think that is the AI story that Dylan and the management team at Figma has been saying. And I think that is the belief that their growth rate is going to be much higher than what they're projecting because of all these AI tailwinds.
7:07 Rebecca Bellan? Yeah, and you mentioned that Microsoft and Meta both had strong earnings reports last week. Microsoft was up seventeen percent in revenue growth. Meta was up twenty-two percent in revenue growth. A lot of the big AI companies that people want to get on the cap tables for, I mean, even Figma, they can't get on to the tables. Do you think that that will create more of a demand for Figma's stock as the year progresses? And even if their earnings are maybe not as amazing as some of us would hope.
7:34 Speaker 02 Yeah, so that's the whole reason why you also want to wait for the lockup. Because right now, if you look at the float, it's only like maybe eight percent of the company's share that are being traded. I think once the lockup expires, you'll have a lot more shares coming into the market. And I think a lot of people will trade at that point. But you know, some of the demand for the stock is also why the shares have created up so much. You know, one of the things I read or heard was that Figma decided to price at thirty-three, which was way below the demand that was there. Because they wanted to actually have these long only mutual funds to be part of the cap table. But I'll bet you that these mutual funds all traded out half or maybe even two thirds of their holding.
8:18 Speaker 02 They are going to lock in all the gains. And that's why you saw on Monday that the stock fell twenty-two, twenty-three percent. So you're going to see this ups and downs for a while till the lockup expires. Because the number of shares that are being traded is so limited. So the float is kind of driving some of this volatility as well as these spikes in the price. I think those will all tend to calm down as Figma generates more revenues and keeps growing. I think they are going to issue more stock out in the public market, so people will get access to their shares.
8:50 Rebecca Bellan? So it's pretty normal for a company to pop and then drop, right?
8:54 Speaker 02 Yeah, I think the difference with Figma is that they actually have a lot of retail demand. If you talk about some companies in our portfolio, which are enterprise software, which is in a companies that only CIOs or, you know, CMOs know about, there is not as much demand because they don't always understand what the company does. But you know, Figma has so much of consumer, so much of retail kind of users who all know and love Figma and they think it's a great product. And so that's why there's also much more demand for this stock than a typical stock that's out there, which is an enterprise software company.
9:28 Rebecca Bellan? Well, yeah, okay. So you mentioned that this has like a consumer appeal. I guess my question there is with a lot of the kind of macro economic climate going on, the tariffs, Trump's tariffs, unemployment report that just came out showing that unemployment is rising, low consumer spending expected, how do you think that that could affect Figma's stock going forward?
9:47 Speaker 02 You know, I don't think tariffs and any of the unemployment numbers affected so much because to some extent, these are high growth stocks and there's enough money in the system, not only from institutional investors, but also retail investors. And look, in some ways, Figma is a little bit of a meme stock. It's not as bad as, you know, some of the other-
10:06 Rebecca Bellan? What isn't a meme stock today, honestly?
10:09 Speaker 02 That's right. I was just joking with somebody else that now all these IPO advisory services should actually tell management teams how to make it into a meme stock. Because there is a little bit of, and a lot of the institutional traders all talk about saying, hey, this is a meme stock and the retail investors have gone in. But even before, there was so much retail demand and, you know, using Reddit or something else to talk about stock, the institutional investors all had a similar kind of a meme way of looking at stocks. Like they would all discuss in one, they got together, hey, this stock is good, that stock is good. Because at the end of the day, the price of shares is driven a little bit by the cash flow and the earnings. But a lot of it is also driven by human behavior, right?
10:53 Speaker 02 And that's what people know and, you know, what people like, what people talk about. And those kind of drive the behavior of people wanting to buy- Buy a particular share, a particular stock.
11:02 Rebecca Bellan? Yeah, yeah, I I wonder what the prediction markets are saying or breaking down about Figma's IPO and how much the stock's going to change. And yeah, it's really just your latest installment of late-stage capitalism.
11:13 Speaker 02 That's right. No, I think that's a great point. I should actually go check one of those markets to see what they're saying about it. I think those things actually, over time, are better predictors than probably what the bankers were doing. One of the things that Bill Gurley has been saying about this, that, hey, the bankers don't price the shares very well. And I agree with that. And it's very hard to break down the institutional kind of nature of how IPOs are priced and traded. Over time, I think it is going to get to a point where you do a price discovery on some kind of a public market, where people will say, hey, this is what I'm going to say, and not just from the institutional investor.
11:51 Rebecca Bellan? Yeah, democratizing pricing strategies.
11:53 Speaker 02 Exactly.
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12:30 Rebecca Bellan? What does Figma's IPO timing tell us about the current market? Are we expecting more IPOs? I mean, we've been in a serious drought lately.
12:37 Speaker 02 I wouldn't say opens up the floodgate, but it definitely makes it easier. And there you will see more companies going public, because I think there is a lot of demand for IPOs. And the way when an IPO market opens is if you look back in history, you first have the really, really high-quality companies going out. Companies like Figma, potentially Canva, really growing at scale. And those are the companies that go out. But once those growth happens, there's more demand for other IPO stocks and kind of not-so-great companies start going on till all the way down. When you actually have companies going out that have no reason or should not be public. So I think that's what we are seeing the trend now that Circle and then Figma have
13:20 Speaker 02 been such great IPOs. I do think some of the companies that are at scale, like, you know, four, 500 million or above in ARR, growing at 30% or above, are all going to come out. So I think the IPO markets are open. I think next year, if things are stable with the US economy, I predict that there's probably going to be many more IPOs. Then over time, it all depends on how many of the companies that are growing at 20% with 200 million can actually make it out. Because I do think that a lot of the companies in the Zerparra are still stuck kind of in no man's land.
13:54 Rebecca Bellan? Yeah. Well, there's also a lot of the companies are getting acquired by larger firms or the larger firms are buying their entire teams. I mean, we've talked about this before on the show, but Figma is one of the ones that got out. Lina Khan has made this point. This is a vote in favor of antitrust enforcement. I mean, for Figma specifically, I believe it was European CMA that kind of got involved and said, no, Adobe, you can't buy Figma. And everyone, you know, said, you're stifling competition, you're stifling innovation. But look what's happened. We see that Figma was allowed to grow. They IPOed at a much higher valuation than they would have gotten from Adobe. Adobe's had to put way more money into its own R and D. So that is actually increasing competition. What do you think?
14:34 Speaker 02 You can't take just one example because, you know, I almost will say that the exception proves the rule here. Figma is an exception. I do think that sometimes the acquisition, even when they are kind of prevented by the Department of Justice or SEC, they're not looking at it the way it should be looked at. Because the challenges are, in a lot of cases, it's probably better for these companies to be part of a larger organization and a larger platform than to be independent. That's why you see a lot of companies that kind of come out.
15:06 Rebecca Bellan? Better for what, though? Better for competition or better for that company's growth or that tech's growth?
15:11 Speaker 02 I think better for innovation. I think the competition always comes from places where you don't really understand how it's going to evolve. It is better for the innovation because the innovation within a company actually gets to more customers because it has larger distributions. And in some ways, you know, maybe does things that are very different than what the founders had thought about. The greatest example of competition is Google, right? Google had like, what, eighty-five percent market share in search? And people are all like, oh, we need to break up Google. And low and behold, right, we have OpenAI and Anthropic now out there with ChatGPT. I know that is like real threat to Google. So my point is that it is very hard to predict where competition is going to come from.
15:56 Speaker 02 Government has to regulate some stuff, but I think when they overreach, they don't realize that just because they're preventing one of these M and As or this acquisitions, it's not really preventing competition. Because even if it was independent, that company is probably really small in scale and can't really stand on its own. And they're not really competitive to a larger tech giant.
16:17 Rebecca Bellan? Right. Well, I think there's maybe a difference between competition and disruption, but
16:20 Speaker 02 Yes.
16:21 Rebecca Bellan? we maybe don't need to harp on to that point too much. There's been an ongoing conversation on the pod about if there's a ceiling for the amount of money these AI companies can make versus how much they're selling out for talent. You know, Windsurf acquired Cognition after Google snatched up CEO and co-founder, among others in the team. Cognition is also now laying off some of the staff and offering buyouts to a lot of the other workers there. What are your thoughts on that?
16:50 Speaker 02 Yeah, look, I think it's a allocation of resources. So if you look at saying that I'm going to spend hundred billion dollars building up data centers in order to run my models, why wouldn't you pay like ten billion dollars to actually hire the AI researchers who actually can come in and build those models that will run on those data centers? So I, you know, just a tenth of the cost that you're spending on building the data center. So from just resource allocation, I think it makes a lot of sense. But I know the complexity is really, you know, you're dealing with human Lives, but I think also the way you're treating some of the employees who are kind of taken with the company when you aqua hire them versus the rest of the company, what happened with windsurf and Codia.
17:32 Rebecca Bellan? Hmm.
17:32 Speaker 02 And I think one of the things that a lot of senior management folks are going to do are probably going to put like double trigger in their contracts. And now, you know, you'd already have double triggers when you get acquired. And now, you know, if you're a VP of engineering or a VP of product, you're probably going to say, I want to have a double trigger if there is an aqua hire kind of a thing. Where I get left behind, but you only take the AI researchers, but I also want to participate in the proceed.
17:59 Rebecca Bellan? Okay, so to just break down, you kind of just did define it, but if you could define for our listeners who don't know what double trigger is.
18:05 Speaker 02 The double trigger means that if there is an some kind of an exit in the company, the shares that are owned by a certain individual vest fully. So that, you know, if you were only vested a third of the shares, if it gets acquired by somebody else, all of a sudden all your shares get vested fully. And then you, you know, participate in the payout to all the shareholders of the company as part of the the acquisition. So it basically accelerates your vesting. And the biggest problem with all of these aqua hires are, you know, these employees who were not taken by Google actually didn't get their shares vested. And now not only didn't they get any money for their shares, and now they're also out of a job.
18:47 Rebecca Bellan? Mm hmm.
18:47 Speaker 02 It's very common for senior management in startups to have these double triggers. So that, you know, in case of an acquisition, they get paid out as much as the founders who have shares versus options.
18:59 Rebecca Bellan? Do you think that that would value the company differently at all?
19:02 Speaker 02 No, I I don't think it's going to value the company. I think valuation of companies are again a negotiation. So it's all about, you know, how much upside people are willing to take and see and pay for the company. So I I don't think it's going to change the valuation, but I do think it's going to definitely change the contracts that people are going to sign to join these companies. Because they don't want to be left behind, you know, if Meta or Microsoft comes in and aqua hires only a few of the folks in the company.
19:29 Rebecca Bellan? Yeah, I mean, I wonder how much power they have. I mean, it seems like there's a squeezing that's happening of the labor market in the tech world. I mean, to work at these companies, the table stakes are you're working eighty plus hours, you're working six days a week, probably actually seven days a week, if we're being honest with ourselves. And you're not seeing that kind of like coddling, that kind of handholding that that a lot of big tech was known for for its employees. I wonder how much actual power they have to negotiate at the signing, or if it's just really we're in the Hunger Games right now.
20:00 Speaker 02 No, I think the only people who have power with signing are the high level management people. Or if you're an AI researcher, right? Now, if you're an AI researcher and you join a startup, an AI startup, you'll probably want this in your contract that you're not one of the researchers that's left behind if somebody Meta or Microsoft or Google comes looking for you. I think, again, right, this double trigger doesn't happen with every employee. It's only the employees who the company really wants to have on board. They are the ones who get the power. But to your question about Hunger Games, I do think that's one of the things that is going to happen, right? In tech, you know, especially if you're an engineer, there was never a have and have not.
20:42 Speaker 02 It was always like, if you're an engineer, you know, you're valued as much as everybody else. But now for sure, there is a huge haves and have nots where, you know, if you're an AI researcher, if what you're doing is valued really highly by an acquirer, you probably will get a huge payout. And if what you do is not valued very highly or can be replaced by a cursor agent, I don't think you get that much leverage and you will kind of suck working for your salary.
21:08 Rebecca Bellan? Yeah. Well, looking more broadly at M and A, I mean, per Crunchbase reporting, M and A was only nine hundred and fifty one million dollars generative AI investments in two thousand and twenty four. That's exclusive of the aqua hire deals. Aside from the AI market, like what other emerging sectors beyond AI are you seeing for M and A or for IPO or just exits in general?
21:29 Speaker 02 I think everybody who is has a enterprise software company are all looking for AI companies. So a good example is Nice just bought Cognig for I think nine fifty million or nine fifty five million couple of days ago that it got announced. So everybody is looking for that AI and we have a portfolio company, MoveWorks, that in the process of getting acquired by ServiceNow. So all of these large enterprise companies are all looking for acquisitions in the AI space. The challenge is, of course, the price that they have to pay. And not all enterprise software companies have the balance sheets that Google, Microsoft and Meta has. I think you're going to see a lot of M and A happening around the edges, like in a company that started out with AI
22:12 Speaker 02 have some traction, but they haven't scaled up. So you will see a lot of those companies getting bought up by the enterprise software company. So I do think that the M and A will definitely scale up in the next twelve months because all the enterprise software companies are out looking for acquisitions to make their AI story much more stronger for the street.
22:33 Rebecca Bellan? And anything outside of AI, I mean, space tech, we're seeing Firefly Aerospace IPO, I think is happening at the time of this recording. Defense tech, stable coins and crypto, anything that you would note?
22:41 Speaker 02 Yeah, yeah, no, we are very bullish both on defense tech and stable coins. You guys have talked about Circle and in some ways, stablecoin is a huge, huge disruptor to the financial services. And I think the, you know, the bill, the genius bill that was passed actually helps stablecoins in a huge way. You'll see more companies, not only IPO-ing around stablecoin, but I do think the whole fintech infrastructure is going to change in the next two or three years because stablecoins allows you to do transactions much more faster and quicker than the current way of doing transactions. Like when you pay a credit card bill, it doesn't get settled for three days. And in the middle, like all these banks are holding your cash before it's paid to the merchant, right?
23:24 Speaker 02 And that is this flood that kind of gets generated and is used by the banks and the intermediary banks has to go away. And I think stablecoin makes it a lot more efficient. So I think we are very bullish on stablecoin. And similarly on defense tech, yeah, like I think Firefly will see how. That IPO goes, I think they increased the share price. So I'm sure there is more demand than what they expected. The new bill that came through, the generational bill, I think it's called, is a huge, huge tailwind for DefenseTech. The US DOD spends about a trillion dollars in software. I don't know how many trillion dollars in hardware, right? And that all has to go to private markets. So yeah, you're going to see a lot more IPOs, I think, coming out of DefenseTech.
24:07 Speaker 02 And you'll see when Anduril or Stax actually goes public, although, you know, they can raise money like OpenAI and Anthropic and be private as long as they want.
24:16 Rebecca Bellan? Yeah, awesome. Well, hey, that's a good note to end it on. Thanks so much for joining us on Equity. Where can our listeners find you online?
24:23 Speaker 02 You can find me on my LinkedIn, which is J A I D A S. And then, of course, at safadventures.com.
24:29 Rebecca Bellan? OK, great. Well, thanks so much for joining us on the show. And to our listeners, you can find me on X and Blue Sky and Equity at EquityPod on the same platforms. Talk to you next time.
24:40 Rebecca Bellan? Equity is produced by Teresa Locan Solo with editing by Kel. We'd also like to thank TechCrunch's audience development team. Thank you so much for listening and we'll talk to you next time.
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