ACCEL Partners Invests US$60m in Sydney Software firm Atlassian

15th Jul 2010. Atlassian, an Australian and global leader in software tools for streamlining product development, today announced the closing of a USD $60M investment from Accel Partners for a minority equity position. Rich Wong, Partner at Accel Partners, will join Atlassian’s board of directors. The funds will fuel Atlassian’s continued leadership in software development and enterprise collaboration tools, through accelerated expansion into Europe and Asia and additional focus on M&A to add complementary products to the Atlassian portfolio. The investment will also be used to facilitate liquidity for Atlassian’s founders and other employees.

Atlassian was co-founded in 2002 by Mike Cannon-Brookes and Scott Farquhar in Sydney, Australia with total start up costs of $10,000 charged to a Visa card and the goal of changing the way the world manages product development. Atlassian’s products include the popular issue tracker (JIRA), enterprise wiki (Confluence) and a range of tools specifically for software developers. The entire portfolio helps teams at every stage of the development process, from creating an initial concept to launching the product and supporting each customer. The self-funded company has been profitable since its inception, and until this round has received no outside financing. Mike and Scott will continue as co-CEOs of Atlassian. Atlassian has 225 employees based in Australia, North America and Europe and revenues in FY2010 of A$59m.

Accel Partners is a leading global venture capital and growth equity firm, providing funding from seed-stage to growth-stage companies. Accel Partners has worked with leading entrepreneurs to help build innovative industry leaders such as AdMob, Facebook, GroupOn, Kayak.com, Macromedia, Veritas, and many others.

“We’ve been fans of Atlassian for years, and the vast majority of our portfolio companies innovate using Atlassian products,” said Rich Wong, Partner at Accel Partners. “We had a front-row seat to how Atlassian’s products help other companies build great software, and that got us excited to help Atlassian reach new markets and audiences. We’re fans of Atlassian’s unique culture, their incredible execution and the continued opportunity in front of them. We look forward to remaining a long-term partner in their quest to help software developers and technical teams everywhere deliver great products.”

“We’ve been on a change-the-world mission since we started. We believe great enterprise software shouldn’t cost an arm-and-a-leg, shouldn’t need a salesperson to explain how it works, and shouldn’t need an army of consultants to get working,” said Mike Cannon- Brookes, Atlassian co-founder and CEO. “With 20,000 customers, we’ve barely made a dent in our mission to have every development team use at least one of our products. We’re excited to have a partner like Accel help us get there.”

Accel Partners stood out “head and shoulders above the rest”,Cannon-Brookes said. The company has invested in dozens of technology firms over the years, with some highlights being Facebook, Foundry Networks, Glam Media, Interwoven, JBoss and Zimbra.

The Accel money will be used by Atlassian for a few different purposes, the first one being founder liquidity. “We’ve been a profitable company for the past eight years,” said Cannon-Brookes. “From a cash perspective it’s really just additive.”

The company has made seven acquisitions over its history and plans more. “As we grow, the size of the acquisitions and the complexity goes up,” he said. And international expansion is also on the cards, with a growing office of 60 staff now in San Francisco and a European office opened in Amsterdam some 12 months ago.

Atlassian sells its enterprise products direct to customers online. Unlike most traditional enterprise software companies, Atlassian does not have a commissioned sales force or a consulting practice. In a world still dominated by complex and inexplicably-pricey enterprise software, Atlassian has focused on refreshing simplicity and affordability. Pricing starts at just $10 for 10-user teams, with proceeds of these “Starter licenses” donated to charity. All Atlassian products are freely available to try for 30 days.

Atlassian’s products are used by over 20,000 customers in 134 countries, from a wide variety of industries. The company’s customer roster reads like a who’s-who of category and market-leaders, with both current and future titans of industry. Atlassian’s customers include:

* ten of the Global Software Top 10, including Microsoft, Oracle
* seven of the 10 largest global companies, including Shell & Toyota
* all 10 of the Top 10-ranked universities in the United States, including Harvard, Stanford, Yale, MIT
* seven of the 10 largest mobile telecommunications companies, including Nokia, Verizon, AT&T
* five of the Top 5 online retailers, including Amazon, Best Buy
* four of the Top 5 game development companies, including Electronic Arts, Ubisoft, Vivendi
* eighteen of FastCompany’s 25 Most Innovative Companies, including Facebook, Novartis, Netflix
* several of the largest and most active opensource software projects, including Apache, JBoss, Zend

By 2004 the company had grown to six developers. Unimpressed with the bevy of wikis on the market, the team created Confluence, the enterprise wiki, which has become the company’s second biggest product after JIRA. In January 2007, the company doubled the number of products it sold when it released Bamboo and Crowd. Eight months later in August Atlassian acquired Cenqua, developers of FishEye, Crucible and Clover. Early in 2008 Atlassian released JIRA Studio, a hosted version of its product suite.

Atlassian’s customer base and revenue quadrupled and tripled during the first few years. It was recognized by BRW Magazine three years in a row as one of Australia’s fastest growing business. In 2006, Mike and Scott were awarded Ernst & Young’s Entrepreneur of the Year award for Australia, becoming the youngest entrepreneurs to ever win the prestigious award.

About Accel Partners

Founded in 1983, Accel Partners is a venture capital and growth equity firm dedicated to partnering with outstanding entrepreneurs to build world-class businesses. Accel invests globally using dedicated teams in each local geography, with offices in Palo Alto, London, New Delhi, Bangalore as well as in China via the IDG-Accel Partnership. With over $6 billion under management, Accels successes include:

* Information security company Imperva;
* Filesharing startup Bit Torrent;
* Mobile advertising network AdMob (sold to Google for $US750 million);
* Video-distribution platform founded by Flash creator Jeremy Allaire, Brightcove;
* Social media website Facebook;
* BBN Technologies, now part of defence contractor Raytheon,

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