Atlassian's plan to list in US a blow to Aussie tech sector

Sydney

A DECISION by Australia's biggest tech company, Atlassian, to pursue a US$3 billion listing in the United States is a blow to Australia's ambitions to make technology a driver of the economy, a tech executive said on Monday.

Atlassian's defection comes just weeks after the elevation of tech-savvy Malcolm Turnbull as prime minister was cheered by the business community, particularly funding-starved startups that are hoping for a more amenable investment climate.

Atlassian, the company behind project management software JIRA and team communication app HipChat, filed an IPO prospectus in the US on Friday. It has hired Goldman Sachs Group and Morgan Stanley to work on the offering.

"The best thing Atlassian could have done for the local sector would have been to list in Australia," said Matt Barrie, chief executive of jobs website Freelancer, which listed on the ASX in 2013, citing the need for major players to build a local market.

Atlassian co-directors Mike Cannon-Brookes and Scott Farquhar, who founded the company in 2002 using credit card debt, declined to comment on Monday. Both have previously cited the maturity of the US markets as a reason to list offshore.

Mr Turnbull's office did not immediately reply to a request for comment.

The Australian tech startup sector has the potential to contribute A$109 billion (S$109.3 billion), or 4 per cent of GDP - up from just 0.1 per cent currently - and 540,000 jobs by 2033, according to a PriceWaterhouseCoopers report.

But fewer than 5 per cent of Australian startups currently grow into sustainable, global businesses, according to Deloitte research, largely due to funding issues.

The Atlassian IPO will set a new record for an Australian technology business, overshadowing accounting software group MYOB's A$2 billion float on the ASX in May. REUTERS