A $54billion (£45billion) software company is leaving London as it seeks a ‘wider set of investors’, in yet another setback to Britain’s bid to woo the tech.
Australian company Atlassian moved to London in 2014, but is in the process of uprooting again and moving 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 domesticate the business entirely in the United States. “.
The move is another blow to the government’s ambition to make the London Stock Exchange a major technology rival to New York. 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 at London Tech Week last month: “If you’re an entrepreneur looking for funding, I want you to look at the UK and say: this is where I Want to be.”
Atlassian declined to comment but referred the Telegraph to an April statement from 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 equity indices, improve financial reporting comparability with our industry peers, streamline our corporate structure and provide more flexibility in access to capital.
The departure of Atlassian is a bad omen for Arm, the British microchip design company. Ministers relied on its Japanese owner Softbank to list the company in London, fearing the industrial powerhouse could leave the UK. It was listed in London before being acquired 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 push to keep the Cambridge-based company in the UK .
Softbank founder Masayoshi Son said New York is currently the frontrunner in the race to host Arm’s float.
London’s reputation as a hotbed of growing businesses was badly damaged by Deliveroo’s float last year. The food delivery sector lost a quarter of its value on the first day of trading alone. More than a third of London stock market debuts in 2021 ended up trading below their listing price, with Deliveroo among the top ten overvalued floats.
Tech companies have long struggled with London. In 2019, Nigel Toon, chief executive of processor startup Bristol Graphcore, said there was a “deeper bench of analyst knowledge in New York” and said US listing rules were more favorable than those from London. His business has yet to float despite a valuation of over £2billion and numerous funding rounds.
Stock market chiefs reacted with concern to the failures of 2021, unveiling plans in May to relax LSE rules for science and technology companies seeking a premium listing. Companies would be freed from having to show three years of revenue growth as well as audited financial statements, according to plans previously reported by the Telegraph.
Atlassian started in Australia as a company making collaboration and software development tools. Its products are primarily used by commercial software development companies.
Eight years ago, Atlassian left its homeland after deciding Australia wasn’t the best place to go public.
Co-founder Scott Farquhar told the Australian Financial Review at the time: “As we move towards a public company, which at some point is very likely in our future… we thought that it would be better prepared for a global investor base. ”
An April investor presentation suggested Atlassian hopes to complete its U.S. move by September or October.