Niklas Zennstrom, CEO of Atomico and co-founder of Skype.
Simon Dawson | Bloomberg | Getty Images
LONDON — Atomico, an early investor in leading European tech companies from Stripe to Klarna, announced Monday the launch of two new funds worth $1.24 billion to back emerging and growth-stage startups in the space.
The launch of Atomico’s sixth new fund, which includes a $754 million growth-stage fund for startups raising Series B funding before IPOs and a $485 million early-stage fund, marks a breath of fresh air for a European tech industry that has been reeling from the slippage in valuation And mass layoffs.
Venture capital funding for European tech startups is set to nearly halve to $45 billion in 2023, down from $82 billion the year before, according to a report. report penned by Atomico last year. The decline is a reversal from pre-pandemic years when tech valuations surged, Atomico said at the time.
The total value of all private and publicly listed tech companies in Europe reached more than $3 trillion in 2023. In 2022, the total market capitalization of the European tech industry fell by $400 billion amid plummeting tech valuations.
Atomico’s new fund size marks a more than 50% increase from the $820 million it raised in its most recent round, Fund V, in 2020. The company was founded in 2006 by Niklas Zennström, who co-founded Microsoft– video calling app Skype has powered some of the most famous companies in the tech sector in Europe.
“European tech is growing. Seizing this opportunity requires ambition, drive and commitment from founders, who need investors with the experience and vision to look beyond market cycles,” Zennström said in a statement on Monday.
“The data shows that Europe is leading the world at the early stage with a lot of new startups. Our new funds give them the strength they need to grow and achieve global scale – from Europe,” he added.
The new fundraising comes as two of Atomico’s major portfolio companies, Stripe and Klarna, are rumored to be headed for upcoming stock market listings. Stripe, the online payments giant, was last valued at $70 billion in a secondary share sale and has long been considered a potential IPO candidate.
Meanwhile, Klarna is discussing a secondary share sale with investors to provide them with liquidity ahead of the Highly anticipated IPOKlarna’s valuation on the open secondary market was in the high tens of billions of dollars, a person familiar with the matter told CNBC last month. The same source said at the time that Klarna’s valuation on the open secondary market was in the high tens of billions of dollars.
Exits are good for VCs and private equity because they provide an opportunity to cash out and profit from equity investments, many of which are typically held for 10 years or more. There was a dearth of major European tech listings this year, but investors are hopeful that 2025 will be the year the IPO window opens.
