A $ 54bn (£ 45bn) software company is leaving London as it searches for a “broader set of investors”, in a fresh setback to Britain’s attempt to court tech.
Australian company Atlassian moved its domicile to London in 2014 but is now uprooting itself again and shifting to the US.
The Nasdaq-listed company is transferring its incorporation to a new holding company in Delaware, the Telegraph can reveal.
At a High Court hearing earlier this month to approve the plans, Martin Moore QC, for Atlassian, told a judge: “The effect of the scheme will be to wholly domesticate the company in the US.”
The move is yet another blow to the Government’s ambition to establish the London Stock Exchange as a significant rival to New York for tech. Successive Governments have tried to attract businesses to London and listing rules were reformed earlier this year to make the capital a more attractive place for tech.
Former Chancellor Rishi Sunak said in a speech to London Tech Week last month: “If you’re an entrepreneur looking for funding – I want you to look at the UK and say: that’s where I want to be.”
Atlassian declined to comment but referred the Telegraph to an April statement by Martin Lam, its head of investor relations.
Mr Lam said: “We believe moving our parent entity to the United States will increase our access to a broader set of investors, support inclusion in additional stock indices, improve financial reporting comparability with our industry peers, streamline our corporate structure, and provide more flexibility in accessing capital. ”
Atlassian’s departure bodes ill for Arm, the British microchip design business. Ministers have leaned on its Japanese owner Softbank to list the company in London amid fears that the industrial powerhouse may leave the UK. It was listed in London before being bought by Softbank in 2016.
Government officials previously blocked a £ 30bn merger between Arm and US rival Nvidia on national security grounds, part of Britain’s efforts to keep the Cambridge-based business located in the UK.
Softbank founder Masayoshi Son has said New York is currently the front runner in the race to host Arm’s float.
London’s reputation as a home for growth companies was badly damaged by the float of Deliveroo last year. The food delivery business lost a quarter of its value on the first day of trading alone. More than a third of stock market debuts in London during 2021 ended up trading below their listing price, with Deliveroo among the top ten overpriced floats.
Tech companies have long encountered difficulties with London. In 2019 Nigel Toon, chief executive of Bristol processor startup Graphcore, said there was a “deeper bench of analyst knowledge in New York” and said US listing rules were more favorable than those in London. His company has yet to float despite a valuation of more than £ 2bn and numerous funding rounds.
Stock market chiefs have reacted with alarm to 2021’s failings, unveiling plans in May to ease the LSE’s rules for science and technology businesses seeking a premium listing. Companies would be freed from requirements to show three years of revenue growth together with audited financial statements, under plans previously reported by the Telegraph.
Atlassian began in Australia as a business making software collaboration and development tools. Its products are mainly used by commercial software development businesses.
Eight years ago Atlassian moved out of its native country after deciding Australia was not the most favorable location to go public.
Co-founder Scott Farquhar told the Australian Financial Review at the time: “As we head towards being a public company, which at some stage is most likely in our future … we thought it would be best prepared for a global investor base. ”
An investor presentation from April suggested Atlassian hopes to complete its move to the US by September or October.