Figma, the design software company, saw its stock surge 5.06% in pre-market trading on Wednesday, as investors reacted positively to news of the company's imminent initial public offering (IPO). The company, which has become a major competitor to Adobe in the design software space, is targeting a valuation of up to $16 billion for its public debut.

The IPO pricing, while lower than Adobe's attempted acquisition price of $20 billion three years ago, still suggests a strong market position for Figma. This valuation demonstrates the company's growth and potential in the competitive design software industry, despite facing off against established players like Adobe.

Investors appear to be encouraged by Figma's ability to carve out a significant market share in the design software space, particularly among collaborative and cloud-based tools. The company's success in attracting both casual and professional users has likely contributed to the positive market sentiment reflected in today's stock movement.

As Figma prepares to enter the public markets, industry watchers will be keen to see how the company performs against larger rivals and whether it can maintain its growth trajectory. The IPO also serves as a reminder of the dynamic and highly competitive nature of the design software market, where innovation and user-centric features can quickly shift market dynamics.