A deep dive on how $1B of capital and a perfectly crafted M&A engine (arguably) created $40-50B of market cap for Atlassian!
Atlassian is a Software Development and Collaboration company driven by a mission to ‘unleash the potential of every team’. Today, Atlassian's products comprising Jira, Confluence, Trello, and Bitbucket, among others, are used by 15M+ users at 230,000+ companies worldwide, bringing home a whopping $2B+ revenue in FY2021.
In its 15 years from inception, the publicly traded (2015 IPO) Australian giant has grown from a single collaborative software development tool (Jira) to a platform of products that address a $24B opportunity of the $126B interconnected markets of Software Development, IT services and Work Management. The addressable opportunity has grown at a compounded 35% over the last 4 years and this 3x increase can be attributed to Atlassian’s investment in R&D (an industry high 34% of revenue) and its acquisition-led growth engine. Let’s dig deeper into how Atlassian acquired/invested in 30 organizations in the last decade, grew to a market cap of $84B of which (arguably) $40-50B has its roots in acquisitions!
Powered by the early profitability around flagship products like Jira and Confluence, Atlassian was aggressive in bolstering their early product lines with acquisitions. Authentisoft for SSO & Authentication, Clover + Crucible for code coverage and review, and Fisheye for accessing repositories. Fast forward 14 years, the company has invested north of $1B, across 18 acquisitions and 12 investments to fill product gaps (speed to market), enhance capabilities (talent and IP) and expand markets.