PayPal versus Atlassian: Could our Australian team become the most influential group of investors?

Atlassian_rich list

Atlassian co-founders Scott Farquhar and Mike Cannon-Brookes. Source: supplied.

The PayPal mafia have been the most influential group of investors and founders over the past decade anywhere. And while Australia doesn’t have an alumni group that have quite reached those global heights yet, the Atlassian mafia is starting to come pretty close.

First, let’s take a quick trip down memory lane.

Paypal was one of the world’s first digital wallets, itself a combination of two competing business: Confinity, which was been founded by Peter Thiel and Max Levchin (Reid Hoffman was an early board member and later COO); and X.com, which was founded by someone called Elon Musk. After surviving a near death experience, the merged business would eventually list on the NASDAQ before being bought by eBay in 2002 for US$1.5 billion ($2.04 billion). eBay then spun out PayPal in 2015 and the business is now valued by investors at a massive $328 billion.

What was so remarkable about PayPal was how its employees have almost recreated the internet since then.

Elon Musk went on to create Tesla, SpaceX and Solar City and is currently the second richest person alive, worth US$160 billion. 

Peter Thiel (who replaced Musk as chief executive of PayPal) was the first major investor in Facebook before going on to create Palantir (now a listed business valued at US$41 billion) where he remains chair. Thiel was also an early investor in payment giant Stripe (privately valued at US$100 billion) and was an early-stage investor in Airbnb. Despite those businesses being collectively worth more than US$1.3 trillion (compared to Musk’s businesses which are worth around $800 billion), Thiel is surprisingly valued by Bloomberg at only US$6.1 billion.

Reid Hoffman went on to found LinkedIn (which eventually sold to Microsoft for US$26.2 billion) and has also been an influential partner at major VC firm, Greylock as well as an early investor in Facebook and Airbnb). 

Max Levchin founded social media business Slide before selling it to Google for US$182 million, before founding payments business Affirm, which listed earlier this year (current valuation: US$18 billion, where he remains CEO). 

Roelof Botha kept a lower profile than Musk and Hoffman, but has been an influential senior partner at the world’s leading VC firm, Sequoia Capital, sitting on the boards of Square, Evernote, MongoDB and Xoom.

Then there’s Jeremy Stoppleman, who worked for Musk at X.com and went on to found reviews site, Yelp; engineers Chad Hurley and Steven Chen who founded and sold YouTube to Google for U$1.7 billion; Keith Rabois who was an early PayPal exec who would later work at LinkedIn and Square, before co-founding Open Door and becoming a venture partner at Khosla Ventures and Founders Fund. Paypal marketing director, Dave McClurewould later found incubator, 500 Startups.

While they may not be the PayPal mafia, Australia’s third and fourth richest people, Mike Cannon-Brookes and Scott Farquhar have created their own mini La Cosa Nostra. In fact, Cannon-Brookes and Farquhar are richer than everyone in the PayPal mafia other than mega-billionaire Musk (Bloomberg values the pair at more than US$20 billion each).

But it’s not merely the pair’s jaw-dropping wealth that makes them so critical to Australia’s burgeoning tech sector, but their willingness to back other young entrepreneurs. Because Atlassian is listed in the US rather than Australia, Cannon-Brooks and Farquhar have been able to slowly diversify their wealth without being unfairly attacked by the Australian press. Rear Window estimated that each would have sold around $1 billion worth of Atlassian shares — only a fraction of their total holding.

Those share sales have funded Australia’s golden generation of technology businesses.

Cannon-Brookes and Farquhar were instrumental in backing Blackbird, Australia’s biggest venture capital firm which was founded by Cannon-Brooke’s friends, Niki Scevak and Rick Baker. Blackbird itself has a remarkable investment record, backing unicorns like Safety Culture, Zoox, Culture Amp and most famously, decacorn Canva (which I ambitiously claimed will be worth US$250 billion in the not too distant future).

Blackbird (and sister incubator, Startmate) also backed potential unicorns Black.ai, Bugcrowd, Coinjar and Skedulo.

Cannon-Brooks also personally funded and has been a director of Tyro since 2009 (currently valued at $1.75 billion on the ASX).

Farquahar has also been a significant supporter of Australian startups, in particularly through Skip Capital, the private investment firm run by Farquahar’s wife and former investment banker Kim Jackson. Skip has made multiple investments in the like of Airwallex, 1Password, Brighte and Morse Micro.

Like the PayPal mafia, the Atlassian team may eventually be more legendary not for creating one of Australia’s most valuable businesses, but for helping incubate the next generations of Australian technology legends.

Adam Schwab is the co-founder and CEO of Luxury Escapes, Startmate mentor, host of the From Zero Podcast and a SmartCompany and Crikey columnist.

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