Atlassian Shares Surge After $462M Tech Unicorn IPO

Unlike many other enterprise software companies, Atlassian does not have a traditional sales staff. Instead, its lists all of its product information, pricing, training material, and support requests directly on its website.

It’s been an unpredictable year for initial pubilic offerings, particularly for tech companies with lofty valuations.

So why has Atlassian – the IPO from the Land Down Under – bucked the trend?

And in 2014, three executives, including the company’s president Jay Simons, agreed to sell $150 million worth of stock to T. Rowe price and Dragoneer Investment Group.

Atlassian’s listing on the NASDAQ is the biggest ever float from an Australian company on USA markets, with the heavily oversubscribed IPO valuing the company at $4.38 billion (AU$6.01 billion).

Scott Farquhar and Mike Cannon-Brookes are the duo behind Atlassian, the software company which exploded onto the United States technology-focused stock exchange the Nasdaq last night, valuing their company at $7.89 billion. Atlassian said it has more than 860 customers who spent $50,000 or more in 2015, including credit card issuer Visa Inc. and electric vehicle maker Tesla Motors Inc.

It is also now comfortably worth more than Australian brand Coca-Cola Amatil, and Australian wine giant Treasury Wine Estates. It is the sixth-most highly valued IPO of the year, according to Renaissance Capital. Just over 50 percent of the company’s revenue for FY15 was a result of maintenance charges.

Atlassian also does not intend to pay a dividend in the forseeable future, which many ASX investors would consider a sacrilegious act, although re-investing for growth is a practice more widely appreciated in North America.

“The truly unbelievable thing is not the IPO – it’s that they were able to build such a wonderful company over more than a decade”, Scevak says. And considering that it was valued at $3.3 billion as a private company, that’s especially impressive. When Square went public, for example, its shares priced at the low end of the spectrum, at $9, which reduced its valuation by half to about $3 billion.

None of that concerns Cannon-Brookes. Thank you to every Atlassian.

Homegrown startup Atlassian’s massive public listing in the USA will act as a “beacon” for local entrepreneurs looking to follow in its footsteps.

“From my experience running companies, I know that having happy employees leads to improved retention, happier customers and higher profitability”, Burgum said.