European VC Firm Atomico Raises $1.1B to Challenge Silicon Valley

European venture capital (VC) firm Atomico, headquartered in London, has successfully raised $1.1 billion in its latest funding round, with a focus on supporting new startups. Despite economic challenges and a tech industry downturn, Atomico remains determined to challenge Silicon Valley's dominance.

Breaking Down Atomico's Funding

Atomico secured $1.1 billion across its new venture and growth funds. Of this total, $600 million is designated for venture funding, while $750 million is allocated for growth funding. The firm has set a fundraising goal of $1.35 billion.

Facing VC Challenges

Recent fundraising efforts by VC firms have faced significant headwinds due to higher interest rates and declining valuations for tech companies. In the first half of this year, European VC funding declined by 60% compared to the same period in 2022. European VC investment dropped by 40% to $20 billion, while North American investment decreased by nearly 50% to $42 billion in the second quarter.

However, Atomico's successful fundraising places it among the highest VC fundraising totals in Europe this year, signaling optimism for year-end fundraising. Several other European firms have also succeeded in raising significant funds, including:

·      Highland Europe secured €1 billion.

·      Software investor Dawn Capital raised $700 million.

·      Norwegian private equity firm Verdane obtained €1.1 billion.

·      Private equity firm Keensight Capital raised an impressive €2.8 billion.

Atomico's Track Record

Founded in 2006 by Niklas Zennström, the founder of Skype, Atomico has become one of Europe's most influential tech investors, backing over 130 startups. Notable companies in its portfolio include Klarna, a fintech group, and Lilium, a flying electric car startup. Currently, Atomico manages $5 billion in assets.

Niklas Zennström envisions Europe as having the potential to compete with Silicon Valley and aims to break the "monopoly" in tech, emphasizing that Europe can build and even surpass similar tech ecosystems.

VC Challenges and Resilience

Venture capital firms have faced numerous challenges over the past year and a half:

·      Heightened inflation

·      The war in Ukraine

·      Dramatic markdowns on private market valuations

·      More conservative limited partners (LPs)

·      A scarcity of initial public offerings (IPOs)

·      Exit values for startups have declined, while asset prices have remained low

Despite these challenges, Atomico's successful fundraising underscores the resilience and determination within the European tech investment landscape. It reflects the region's commitment to challenging Silicon Valley's dominance and supporting the growth of innovative startups.