Atomico raises its largest fund yet, with $820m to back Europe’s “mission-driven” startups

Atomico raises its largest fund yet, with $820m to back Europe’s “mission-driven” startups

The venture capital firm Atomico has closed its fifth fund, raising $820 million to invest in European startups, according to Tech Crunch

It’s the largest fund raised by the London-based VC firm since it was founded by Skype co-founder Niklas Zennstrom in 2006. The fund will focus on backing “mission-driven” projects at the Series A stage, but also has reserves to fund certain “breakout” companies at Series B and C.

Atomico has always focused on backing entrepreneurs who are working to address global problems, with innovative solutions for sustainability, healthcare, and education. 

The company says the new fund will work with “ambitious European founders, who deliver positive, transformational change across every aspect of society and the economy.”

“We’re guided by a simple belief: profit and purpose are mutually reinforcing, not mutually exclusive,” Zennstrom said in a statement. 

He’s argued that entrepreneurs, not politicians, are society’s “changemakers,” given how society and the economy are shaped by innovation and technology.

Atomico also believes that the time is right for big investments into Europe’s startup scene. Investment partner Siraj Khaliq pointed to an emerging “renaissance” in the European tech sector, noting the past decade’s rising number of “unicorns,” private tech firms valued at $1 billion. In 2014, there were just 22 across the continent, while today there are over 100.

“Now the talent exists here, the mentorship exists here. All these key ingredients you need for European success stories actually exist,” Khaliq told CNBC. 

Khaliq says Atomico provides not only funding, but also advice and expertise. The firm helped him co-found a weather modeling startup working to optimize crop yields for farmers, before he joined the VC firm. 

“I really liked the Atomico model, which is not necessarily just finance people but people who have built businesses themselves. They bring more than just money, they bring experience.”

Atomico declined to name its investment partners in the new fund, but said it‘s drawn participation from pension funds, sovereign wealth funds, and founders from European startups such as Ayden, Klarna, and TransferWise. 

The new fund brings Atomico’s total assets to $2.7 billion. 

“We’re one of the VCs that’s been around longest in Europe,” Khaliq said. 

“What that means is we have a kind of discipline when we look at European start-ups, how much they’re worth and what the valuation is for entry.”

Photo by Steve Buissinne from Pixabay