IPO Report: Figs IPO: 5 things to know about the healthcare apparel company before it goes public


Figs Inc., an apparel and lifestyle company for healthcare workers, has filed to take the company public, eight years after the co-founders started the company by selling products out of their cars.


has already set terms of the initial public offering, in which the company plans to offer 22.5 million shares priced at $16 to $19 each, to raise up to $427.5 million. At that pricing, the company would be valued at up to $3.07 billion.

Trading app Robinhood said last Thursday its users can request a chance to buy pre-IPO shares in Figs, something that has not typically been available to retail investors. Read more about Robinhood’s IPO Access. In general, pre-IPO shares can be subject to lock-up agreements, which prohibits sales of those shares for at least 180 days.

Figs is expected to begin trading this week on the New York Stock Exchange under the ticker “FIGS.” There are 15 banks underwriting the deal, led by Goldman Sachs and Morgan Stanley. 

Net revenue for the company grew to $263.1 million in 2020 from $110.5 million in 2019. The company grew from $17.6 million in 2017, a compound annual growth rate (CAGR) of 146%.

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In 2020, Figs had operating income of $57.9 million after a net operating loss of $300,000 in 2019.

The 2020 active customer tally was 1.3 million, up from 600,000 in 2019.

Launched in 2013 and based in Santa Monica, Calif., Figs is an emerging growth company, which means it does not have to make the same disclosures required of bigger public companies. A business remains an emerging growth company until it reaches a number of milestones, including annual revenue of more than $1.07 billion.

Figs quotes Bureau of Labor Statistics data showing that the U.S. healthcare sector included more than 20 million workers in 2020. U.S. employment is expected to grow 15% between 2019 and 2029.

Separate data from Frost & Sullivan puts the total addressable market for healthcare apparel at $12 billion in the U.S. and $79 billion globally.

“Unlike most other categories in the apparel sector, the healthcare apparel industry is largely non-discretionary, recession resistant and much less susceptible to fashion or fad risk,” the prospectus said.

“Over time, healthcare apparel purchasing has shifted from institutions to the individual, with approximately 85% of all medical professionals now purchasing their own uniforms. Due to frequent wear, healthcare apparel continuously needs to be replenished, resulting in highly predictable, recurring demand for such products.”

Figs serves a wide range of people in the healthcare profession, including home health aides, registered nurses, veterinarians and medical students.

Figs says it takes a similar approach to one for athletes and athletic gear: focus on innovation and technology to maximize comfort and performance. The company has created its own FIONx fabric technology, and offers items with features like anti-odor and moisture-wicking capabilities.

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Figs was founded by Heather Hasson and Trina Spear, who started the business in 2013 selling product out of their cars. Now they serve as co-chief executives.

“Every morning at 7 a.m. and every evening at 7 p.m., we parked outside of emergency rooms, waiting for professionals to change shifts,” the CEO letter attached to the prospectus reads, describing the company’s beginnings.

“We handed them a fresh cup of coffee and sold them Figs from the back of the car.”

Hassan said they also spent time in hospital cafeterias and talking with workers to learn more about their jobs, challenges, how they moved around, and more.

“For a healthcare professional, well-designed pockets don’t just hold your keys or money to run around a track,” the letter says. “[T]hey hold the tools that may save someone’s life.”

Prior to launching Figs, Hasson was an entrepreneur, operating a high-end bag line and FIGS Ties, a tie and scarf company.

Spear was previously an associate at the Blackstone Group.

The company is looking to go public at a time that the Renaissance IPO exchange-traded fund

has dropped 15.6% over the past three months through Friday, while the S&P 500 index

has gained 5.9%.

Here are five more things to know about Figs before it goes public:

Figs stock will have a dual-class structure. After the IPO, Figs will have Class A stock, which will have one vote per share, and class B stock, which will have 20 votes per share and is convertible into one share of Class A common stock.

All outstanding class B shares will be owned by the company’s co-founders and by majority shareholder Tulco, LLC. After the IPO, those holders will represent 79.3% of the voting power of the outstanding shares.

Figs doesn’t plan to offer a dividend. The company will use all proceeds from the IPO for business purposes.

Figs only has one non-employee board director listed. Aside from Hasson and Spear, company management consists of Jeffrey Lawrence, chief financial officer since December 2020. Lawrence was previously CFO of Domino’s Pizza Inc.

Hassan and Spear are also on the board.

The company only had one non-employee board member at the time of the prospectus: J. Martin Willhite, vice chairman at Tulco LLC since June 2017. He has served on the board since February 2019.

Nearly all of its sales are on its own digital platform or mobile app. Previously, healthcare professionals had to travel to a bricks-and-mortar store to purchase scrubs and other gear, according to the prospectus.

Figs says 98% of its sales are through its digital platforms.

“Further, we are able to engage with our community of healthcare professionals before, during and after purchase, through our digital platform and numerous other channels,” the company says.

The company leverages social media and a network of ambassadors, 250 healthcare professionals around the world, along with data science and proprietary technology to keep in touch with the community and gather information about its target market.

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Most of the company’s net revenue is generated by recurring styles. According to the prospectus, 82% of Figs net revenue is generated by 13 core scrubwear styles, with the remaining revenue coming form limited-edition items and non-scrub merchandise, including lab coats, compression socks, face shields and more.

Limited-edition items are launched on a near-weekly basis, and drive traffic to the core items.

“[O]n average, 90% of sales on launch days are core styles,” the prospectus said. “This innovative, lower-risk merchandising strategy drives recurring demand while maintaining inventory efficiency.”

The company says there’s room to expand further into these non-scrub items.

Figs is looking across other professions and other locations to grow. Figs launched pilots in Australia, Canada and the U.K. in 2020.

“In order to offer a more localized experience to customers internationally, we plan to launch products that are specific to local markets and digital experiences that are tied to local culture. We also intend to offer market-specific languages, currency and content, as well as strategic international shipping and distribution hubs,” the prospectus said.

Figs is also exploring options in other professions where a uniform is required. The company estimates there are 40 million people working in areas outside of healthcare, like food service, hospitality, construction and transportation, who could use more technical gear that would facilitate them doing their jobs.

“In our view, these markets—similar to the healthcare apparel market—have long been underserved by incumbent apparel manufacturers and are ripe for disruption,” according to the prospectus. “We believe we are strategically positioned to leverage our core competencies to expand into these new markets in the future.”

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