Australia's Atlassian to raise up to $425.5m in US IPO

According to a regulatory filing, Atlassian will sell 20 million shares at between $16.50 and $18.50 apiece, with underwriters able to sell a further 3 million shares depending on market demand. This equates to an overall valuation of $3.4-3.8 billion, compared to the reported $3 billion valuation at which the company raised its most recent private funding round.

Accel Partners is not selling any shares in the IPO but its holding will be diluted from 12.5% to 11.3%. Co-founders Mike Cannon-Brookes and Scott Farquhar each own 37.2% of the company. They will be diluted to 33.6% apiece due to the issue of new shares.

The duo, who met while studying at the University of New South Wales in Sydney, set up Atlassian in 2002. The company develops products aimed at software developers and project managers. Its core offering is JIRA, which is used to manage team workflow. Atlassian has also created a host of other applications, including a private chatroom service, a workplace collaboration platform, and various systems integration and optimization services.

Atlassian has more than five million monthly active users of its products and in excess of 51,000 customers, defined as organizations with at least one active and paid license or subscription for which they paid more than $10 per month. Customers range from small and medium-sized enterprises to 79 members of the Fortune 100.

The firm has been profitable for each of the last 10 financial years. Revenue came to $319.5 million for the 12 months ended June 2015, up from $215.1 million the previous year. Maintenance accounts for approximately half of revenue, followed by subscriptions and perpetual licenses. Net profit fell to $6.77 million in 2015 from $18.9 million in 2013, largely due to a substantial increase in R&D expenditure.

Atlassian is the 27th largest unicorn - private start-ups with valuations of $1 billion or more - globally and the ninth largest in Asia Pacific, according to CB Insights. It has raised $210 million across two rounds, the most recent a $150 million commitment from T. Rowe Price and Dragoneer. Accel, which made a partial exit in the second round, initially invested $60 million in 2010.

Goldman Sachs and Morgan Stanley are joint lead managers for the offering.

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