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Everyone wants a piece of software maker Atlassian's ass

SaaSy playa hikes IPO price by double digits

Investor hunger to grab a slice of Atlassian has led the Aussie-turned-Brit-based software-as-a-service developer to upgrade its IPO price range by double digits, valuing the business at $4.1bn.

The enterprise software organ, which is set to list on NASDAQ this week, had expected to issue stock at between $16.50 to $18.50 per unit but has now ratcheted up this to between $19 and $20.

The number of shares to be issued has also risen to 22 million from 20 million. The flotation is expected to generate funds of $440m, up from $360m, which itself was a rise from the original $250m expectation. Clearly the world is getting crazier for cloudy software companies.

Atlassian is offering only eleven per cent of its shares in the IPO and so existing shareholders will retain the vast majority of the organisation.

The JIRA and Bitbucket vendor made $7m of net profit on $320m of revenues in the most recent financial year, meaning the market cap is some 600 times the level of bottom line goodness achieved.

The company is quite unique in that it sells a messaging service, project management wares and a document sharing/ collaboration service without an enterprise sales force. Around one half of Atlassian’s staff work in product design and development, and the highest operational overhead in the past three years is some $250m on R&D.

Atlassian operates on a subscription model and has been profitable in every quarter since it founded in 2002.

Read this and weep Mr Benioff, because Salesforce.com has rarely broken into the black since it was founded.

The prospectus stated Atlassian concentrates on “automated distribution and customer service in lieu of a costly traditional sales infrastructure.

“We rely on word-of-mouth and low-touch demand generation to drive trial, adoption and expansion of products within customers”.

The corporate culture? “Open Company, No Bullshit, Don't #@!% the Customer”. ®

 

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