Collaborative design software startup Figma Inc. today confirmed it has closed on a significant funding round led by a group of investors including Coatue Management, Alkeon Capital Management and General Catalyst Partners.

The size of the deal was not disclosed, but Bloomberg reported that it values the company at $12.5 billion. The report cites people with knowledge of the matter as saying that Figma delivered more than $700 million in annual recurring revenue in fiscal 2023.

The person said that number is projected to grow to more than $1 billion this year. In late 2022, it was reported in a filing that Figma’s ARR stood at just $400 million.

Figma, which is led by Chief Executive Dylan Field, was founded in 2012. It offers a cloud-based platform for designing user interfaces for websites and applications. Its collaborative tools enable multiple stakeholders to work together and edit an interface at the same time. The platform also enables users to collect feedback from others who are participating in a project, such as software developers.

In addition, Figma offers a range of no-code tools that can simplify the design of complex UI components without needing to write any software code to create them.

The company became an acquisition target for Adobe Inc., which tabled an offer of $20 billion in September 2022. Figma’s shareholders agreed to the deal, but after months of wrangling with regulators, the two companies ultimately called off the acquisition, saying there is “no clear path to receive the necessary regulatory approval” required to push it through.

Since calling off that acquisition, Figma has doubled-down on artificial intelligence, introducing features such as an AI-powered visual storytelling tool called Figma Slides.

However, the rollout of its AI tools has had some setbacks. Earlier this month, the company was forced to disable a new tool called “Make Design,” which uses generative AI to create full-fledged application UIs for users based on natural language commands. At the time it was launched, Figma said the user simply has to outline what kind of app they want to make, such as a “weather app,” and Make Design will go right ahead and make it.

Unfortunately for Figma, the tool appears to have struggled to create original work. In a blog post, the software executive Andy Allen revealed how Make Design would simply regurgitate a slightly different clone of Apple Inc.’s stock weather app, every time he asked it to design a weather app from scratch. Figma responded by “temporarily disabling” the Make Design tool, and it has yet to return.

In a statement to Bloomberg, Figma said it had closed on a “secondary share sale” but declined to name all of the investors involved, and did not confirm its revenue. Secondary share sales are also known as tender offers, and they can involve both current and former employees, as well as other equity holders.

According to the Figma spokesperson, some of the investors that were confirmed to have been involved in the new round include SurgoCap Partners, Atlassian Corp., Fidelity Management & Research Co., Franklin Templeton’s Franklin Venture Partners and Iconiq, Sequoia Capital, Thrive Capital, Greenoaks Capital Partners, Durable Capital Partners, Andreessen Horowitz, Kleiner Perkins, Apple Inc. executive Eddy Cue, Goanna Capital and XN.

Image: Figma