Atomico raises $1.24B fund for European startups from seed to pre-IPO

Atomico, one of the largest venture capital firms in Europe, has raised $1.24bn to support startups in the region.

This is its largest fundraise to date, Atomico says, although falling slightly short of its initial target of $1.35bn.

The total amount is a combination of two different funds. The first fund has secured $485mn for early-stage companies, primarily targeting Series A, but also including some seed investments.

The second fund will focus on growth investments, to which Atomico expanded in 2011. It will allocate $754mn to support entrepreneurs from Series B up to the pre-IPO stage.

Launched in 2006 by Skype co-founder Niklas Zennström, Atomico has employed a founder-focused approach. It counts over 155 investments across 15 European companies.

The VC firm says that one in six of its portfolio startups is currently valued above $1bn. This includes machine translation company DeepL and buy-now-pay-later unicorn Klarna.

The two new funds aim to further support Europe’s growth, as Atomico believes the region is currently emerging as a strong competitor in the global tech landscape.

“European technology is coming of age,” said Zennström.

“Data shows Europe is leading the world at the early stage with a wealth of new startups.”

The region is outpacing the US in the creation of new companies and now accounts for approximately 30% of global early-stage funding.

However, the picture is different for late-stage funding, which almost halved in 2023 compared to the previous year.

“There’s a clear need for more growth capital and for European institutional investors to step up, together with the next generation of venture funds and growth investors, to address this gap,” Laura Connell, Partner at Atomico, told TNW. 

The overall fundraising environment for startups remains tough and the number of active investors in Europe’s VC ecosystem fell more than 50% in June.

But there are signs of recovery. VC investment rose to $29bn in the first half of 2024, with energy and GenAI startups driving growth.