Atlassian founders instant billionaires after US float

Australian software firm Atlassian has exceeded expectations for its US float.

Scott Farquhar and Mike Cannon-Brookes, co-founders of Atlassian, who each own 37 per cent of the company.

Australian software firm Atlassian has exceeded expectations for its US float, further lifting its share price to $US21 per share.

The pricing sets Atlassian’s valuation at $US4.4 billion ($6bn), a record for a publicly listed Australian technology firm. This has made co-founders Mike Cannon-Brookes and Scott Farquhar instant billionaires, based on their 37 per cent holdings in the company. Each will be worth $US1.63bn on paper.

Silicon Valley-based venture capital firm Accel Partners will also see a payday — on paper at least. It holds a 12.7 per cent interest that it bought in 2010 for $60 million.

Atlassian, which will begin trading for the overnight session in New York under the ticker symbol “TEAM”, had previously listed a share price range of $US16.50-$US18.50 when it filed its offer documents just over a week ago.

At this valuation Atlassian would be bigger than companies such as Medibank Private ($5.9bn) Fortescue Metals ($5.7bn) or even Bank of Queensland at ($5bn).

Australia’s biggest technology firm remains Computershare at $6.4bn. If successful, Atlassian’s US listing would also be more than double that of other local software firm MYOB’s float earlier this year.

The software tools maker, which counts about 51,000 customers worldwide including Facebook, NASA and Netflix, specialises in productivity and collaboration tools for businesses. Key products include JIRA, HipChat and Confluence.

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The Australian duo have run the business and relied entirely on its profits to fund expansion, an unusual feat in an era when most tech start-ups raise hundreds of millions of dollars from venture capitalists before they make profits or even think about an initial public offering.

Mr Cannon-Brookes recently defended his decision to list the company in the US rather than Australia, which some criticised as a blow to the local tech sector.

“We are passionate and dedicated to improving the Australian industry. It’s a huge priority for us as a company and we have to do that,” he said in a recent ­interview.

“We spend a huge amount of time on that and it’s an essential part of our ­company.”

The company was founded in 2002 and has 1395 employees across 12 cities.

Earlier this year, Mr Farquhar explained how the company’s unconventional business model works and why it also gives away 1 per cent of its profits each year.

“If you look at how the world used to work 10-20 years ago the most important part of selling is the distribution model — it’s how you get products to market. Products themselves are secondary,” he said.

“We’ve almost inverted the model and spent more on building products … we can now afford to build a great product and word of mouth spreads. (It’s about) getting out of the way of the customer.”

University friend to the duo and Blackbird Ventures co-founder Niki Scevak told The Australian that Atlassian’s listing was a “man on the moon” moment.

“If you think about the moon landing, the planting of the flag is obviously the milestone event and what people remember. But what was truly remarkable was that they got to the moon.”