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Why Everyone Is Talking About Atlassian, the Profitable Aussie Unicorn Going Public Tomorrow

Looking for meaning in the IPO market.

Atlassian

The last few weeks have been pretty good for unicorns that want to go public, making for a relatively upbeat end to a slow 2015 IPO market.

Square, which took an initial markdown from its private valuation, has been trading above its IPO price ever since. The Match Group’s public offering was overshadowed by Tinder CEO Sean Rad’s bizarre, sexually explicit interview that came out just beforehand, but the company’s share price popped anyway.

Tomorrow, another buzzed-about tech company is going public. It’s an Australian management and workplace software maker called Atlassian. It’s set to begin trading on the Nasdaq tomorrow under the ticker symbol TEAM. And already, venture capitalists and journalists are trying to figure out where Atlassian stands in the grand “Tech Bubble or Nah?” debate.

Atlassian is looking to raise $440 million at a $4.2 billion valuation, up from the $370 million at under $4 billion it was shopping around last week. The bootstrapped Sydney, Australia-based startup has never taken any VC funding, and says it has been profitable for the last 10 years. The service it offers that people are most likely to have heard of is HipChat, an office chat and workflow management service that’s squaring off against Silicon Valley-adored Slack. CNBC has a detailed rundown on what Atlassian’s IPO prospectus says about its business.

And of course, Atlassian is already being held up by investors and journalists as:

  1. An example of why more unicorns will go public;
  2. An exception to an overvalued class of billion-dollar companies;
  3. And proof that the tech bubble is basically hogwash.

Reuters’ Heather Somerville says Atlassian’s IPO could open the market for more unicorn tech IPOs, and the Wall Street Journal’s Telis Demos cites analysts and investors who largely describe Atlassian as a rarity in a weak software IPO market that could have stayed private if it wanted to.

Benchmark general partner Bill Gurley has said that the proliferation of billion-dollar startups is a sign of a “speculative and unsustainable” period in Silicon Valley, and wants these companies to test their mettle in the public market. Gurley, who never misses an opportunity to call unicorns overvalued, tweeted out the Reuters piece, adding, “All profitable unicorns, head to the exit! Oh wait … are there others?”

Gurley’s vocal antsiness about private investors propping up companies with outsized valuations is well founded. The tech IPO market slowed to a seven-year low in 2015. Private equity firms like Fidelity and BlackRock have recently revised down the worth of their stakes in multibillion-dollar startups like Snapchat and Zenefits, shaving billions of dollars off their value.

In years past, you didn’t really see these kinds of massive late-stage growth investments. The thinking goes that such private investors will give money to startups at excessive valuations, whereas the public markets would bring some of these companies’ values back down to earth. Fortune’s Dan Primack has a smart post on some of the SEC rule changes that have enabled this trend over the last decade.

Atlassian is an outlier to all this. A decade of profitability buys a lot of credibility with investors, and having never taken venture dollars, it doesn’t have to worry about activating a ratchet if something goes wrong tomorrow.

But the attention Atlassian is drumming up perfectly captures the anxiety of the moment. Investors and analysts are reading a lot into three IPOs over a month-long period, whereas back during the dot-com bubble, “a company went public almost every single day.”

With a combination of low interest rates, a federally funded economic recovery after the Great Recession and the high returns from software startups, Silicon Valley began a boom of sorts in the late 2000s. Now everyone’s looking to Atlassian and anything else that could be a sign for when the music stops playing.

A representative for Atlassian declined to comment for this story.

This article originally appeared on Recode.net.