Atlassian soars to $8 billion valuation on stock exchange debut: Why Scott Farquhar and Mike Cannon-Brookes listed in the US

Atlassian soars to $8 billion valuation on stock exchange debut: Why Scott Farquhar and Mike Cannon-Brookes listed in the US

Scott Farquhar says taking former Smart50 finalist Atlassian public was “definitely” not something he and co-founder Mike Cannon-Brookes planned when they founded the software firm 13 years ago.

“It’s not something you really think about when you are eating ramen noodles while writing code in a bedroom with no heater at 3am,” Farquhar told SmartCompany this morning.

Instead, Farquhar says the pair began to consider taking Atlassian public around three or four years ago.

“We began preparing the company and doing everything we need to do,” he says.

That preparation has well and truly paid off, with the Australian-born company jumping on the NASDAQ in spectacular fashion.

Shares in Atlassian’s heavily oversubscribed initial public offering were priced at US$21 apiece but had soared by more than 33% to a high of US$28.05 by the close of trade.

The strong appetite among investors for the stock valued the company at approximately $US5.85 billion ($8 billion)

Atlassian collected revenue of $US319.5 million in the 2015 financial year and according to its IPO prospectus, has been profitable for the past 10 years.

Already Rich Listers, the float catapults Farquhar and Cannon-Brookes into the top 20 wealthiest Australians, with each now estimated to be worth $2.7 billion.

 

 

“We’ve always taken a long term view”

Speaking to SmartCompany from the floor of the NASDAQ trading room, Farquhar says the strong interest in Atlassian from the market is recognition for “13 years of hard work”.

“We’ve assembled a great list of investors that shares a long-term view of Atlassian and that’s something that’s really important to us,” he says.

“It’s recognition of the work we have done over the past 13 years and of the incredibly large market for the things we do at Atlassian.

“We make teams more productive and collaborative and there is an incredibly large market for that.”

While Atlassian could have opted to list in Australia, Farquhar says the decision to go public in the US was about putting the company “in front of investors who are familiar with our kind of software”.

“And we think the market for capital is pretty global so the investors who have followed us in Australia can still purchase stock on the NASDAQ,” he says.

Asked whether Farquhar’s and Cannon-Brookes’ jobs will now change that they are leading a public company, Farquhar says he doesn’t believe so.

“We’ll be telling our story to a larger number of customers,” he says.

“We’ll continue doing what we’ve done so far.”

But Farquhar says the process of growing Atlassian to the size it is and taking it public has taught him a number of things.

“It has solidified in everyone’s minds the incredible opportunity ahead of us to make teams more productive,” he says.

Atlassian currently offers a suite of software products aimed to improving productivity within organisations – including planning and project management tool JIRA, chat program HipChat, and document collaboration tool Confluence.

Atlassian’s goal is to use these tools to “do what Mircosoft did” to how businesses currently use word processing and email.

Atlassian currently boasts a client base of 50,000 organisations in 160 companies that use its products.

“During the roadshow, investors have really acknowledged the huge opportunity we have to help corporations with knowledge-based workers,” Farquhar says.

And for a company that is using the ticker TEAM for its stock, Farquhar says the past few years have also demonstrated the importance of its own employees.

Atlassian has 12 employees who have been with the company for more than 10 years and these employees were all there when the bell was rung for the company’s first day of trade on the NASDAQ.

“It’s one of the broad things you learn over time, how important people are to a business,” Farquhar says.

“It’s a truism that becomes clearer over time.”

 

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