Atlassian under no pressure to list: Cannon-Brookes

A new venture capital investment by T.Rowe Price has lifted Atlassian's value to be worth US$3.3 billion.
Written by Aimee Chanthadavong, Contributor

Australian-founded software company Atlassian has reportedly been valued at US$3.3 billion after existing shareholders sold some of their shares worth a total of US$150 million.

The Wall Street Journal reported that some 800 employees and ex-employees with shareholdings, together with US-based venture capital fund Accel Partner, the only outside backer of Atlassian, will voluntarily sell a portion of their shares to investment firm T.Rowe Price.

"I think everyone is happy about [the sale]...it's a validation of the hard work they have put in," founder and co-chief executive Mike Cannon-Brookes told ZDNet.

The report also noted the idea for the sell-down is to liquidate shares that have been held by some employees who have worked there for more than 10 years.

However, the report said neither Cannon-Brookes nor his fellow co-chief executive Scott Farquhar, who cashed in some of their shares in the 2010, will be selling any shares this funding round.

Cannon-Brookes said the company is generating enough cash and is in no hurry to raise money in the public markets. In fact, Atlassian's compound annual growth rate for the last five financial years during 2008 to 2012 has been over 40 percent, and cash flow has been positive for the last decade.

"We don't have the pressure other companies have to get through a public offering," he said.

There were speculations that Atlassian was going to complete an initial public offering (IPO) on the Nasdaq stock exchange towards the end of 2013, but no movements have been made since. Cannon-Brookes said the company is just waiting for the right time.

"We're not putting it off or anything. We've said all along it's a natural step we'll take at some stage in the future," he said.

"We are, as a company, in control of our own destiny, which is a great position to be in, and we want to make sure we as individuals, as the founders and CEO, and also the whole company are ready, both culturally and number wise."

For now, Cannon-Brookes said it will be business as usual where they will continue to "keep plugging away and try to build really good things and solve problems for people, and let the rest take care of itself".

Offering shares to its employees has been a strategy from the start for Atlassian. It's an incentive to encourage employees who are unsure of whether to join a startup. It's a promise to have a share in the company's future riches, much similar to cash bonuses that large corporate firms often offer to their employees.

Atlassian VP of talent Joris Luijke told ZDNet last February that Atlassian's arguably most important asset is its people, and believes an employee stock ownership plan (ESOP) is the best way to keep them around.

"Any employee can leave us tomorrow," he said. "At Atlassian, any HR managers, the executive team, all we think about every day is talent, and how we can keep that talent. For us, that's everything.

"The ESOP has been very successful."

The company was founded in Sydney in 2002 to create better software tools for software developers to work and collaborate. They came out with their first product, JIRA, a bug and project-tracking software, in 2003. By 2011, the company was making AU$59 million in revenue. It then acquired San Francisco-based private chat company HipChat after trying the product internally for nine months.

Earlier this year, it became clear the company made the decision to relocate its company headquarters to the United Kingdom for better tax treatment then what it gets in Australia.

Farquhar himself said, in an interview with ZDNet, that tax laws in Australia are not helpful for startups.

"I think the local tax laws are a struggle, and I think equity-raising laws are a struggle, too. I'd like to see more of the policy changes to make the startup scene better," he said.

"Most people, including myself, would recommend to startups to incorporate their companies overseas. I think the government can do a lot more with startups, and I'll keep pounding on that until we see some meaningful traction."

Editorial standards