Atlassian to buy Trello for $US425m

Australian software industry star Atlassian is buying US firm Trello, adding a collaboration service to its workplace tools.

Atlassian begins trading on the Nasdaq. Pic: Reuters

Australian software industry star Atlassian has agreed to buy privately-held Trello for $US425 million ($577.6m), adding a collaboration service to its portfolio of workplace software tools for teams.

Trello’s namesake product is a collaborative digital whiteboard that lets far-flung colleagues organise projects, create to-do lists and assign tasks. It began as an internal project-management tool that was spun off Fog Creek Software in July 2014. That month, Trello raised $US10.3 million from Index Ventures and Spark Capital in its only round of outside funding.

The purchase price includes about $US360 million in cash and the remainder in Atlassian restricted shares, restricted share units and options to acquire Atlassian stock. The transaction is expected to close by March 31.

Trello is part of a market known as social task management that also includes Asana, Workfront, Wrike and Planview, according to technology advisory firm Constellation Research Inc. These products are a response to the fact that many employees are overwhelmed with a large amount of information coming from a wide variety of sources, said Alan Lepofsky, vice president and principal analyst at Constellation Research. “The need to organise and prioritise work is at an all-time high,” he said.

Microsoft bought the German start-up behind the task-management mobile app Wunderlist in July 2015. The Wall Street Journal reported that Microsoft paid between $US100 million and $US200 million for 6Wunderkinder GmbH.

Larger companies such as Microsoft and Atlassian may be interested in collaboration start-ups because they are part of a fast-growing enterprise application software market. Sales in this segment, which research firm Gartner calls web conferencing, collaboration and social software, were estimated at $US4.7 billion last year and are expected to grow to $US7 billion in 2020.

With the purchase of Trello, Atlassian continues its efforts to broaden its customer base beyond technical teams to also include general business teams.

Atlassian founders Mike Cannon-Brookes and Scott Farquhar.

US-listed Atlassian, founded in Sydney in 2002, is best known for products that help teams of software developers and information-technology workers. More than half of Trello’s users are working in non-technical teams in finance, human resources, legal, marketing and sales, according to Atlassian.

Trello has nearly doubled its registered user count to 19.5 million from 10 million in October 2015, a reflection of how quickly the nature of work is changing, said Jay Simons, president of Atlassian.

Dow Jones Newswires