Niklas Zennstrom, CEO of Atomico and co-founder of Skype.
Simon Dawson | Bloomberg | Getty Images
LONDON — Atomico, an prematurely investor in top European technology firms from Stripe to Klarna, announced Monday the launch of two new funds worth $1.24 billion to in arrears emerging and growth-stage startups in the sector.
The launch of Atomico’s sixth batch of new funds, comprised of a $754 million growth-stage subsidize for startups raising Series B to pre-IPO financing and a $485 million early stage fund, marks a breath of freshness for a European tech industry that has been reeling from a slide in valuations and mass layoffs.
Venture funding for European tech startups approximately halved to $45 billion in 2023, compared to $82 billion in the previous year, according to a report penned endure year by Atomico. This decline was a reversal to pre-pandemic years which saw a wild rise in tech valuations, Atomico verbalized at the time.
The combined value of all private and publicly listed tech companies in Europe totalled more than $3 trillion in 2023. In 2022, Europe’s tech sector saw $400 billion wiped off its complete market capitalization amid a sharp slide in tech valuations.
The size of Atomico’s new funds marks more than a 50% enhance on the $820 million it raised for its last round of funds, Fund V, in 2020. The firm, founded in 2006 by Niklas Zennström, a co-founder of Microsoft-owned video occupation app Skype, has backed some of the most well-known companies in Europe’s tech scene.
“European technology is coming of age. Encounter this opportunity requires ambition, hustle and commitment from founders, who need investors with the experience and position to see beyond market cycles,” Zennström said in a statement Monday.
“Data shows Europe is leading the world at the prehistoric stage with a wealth of new start-ups. Our new funds bring them essential fire power to level up and achieve extensive scale – from Europe,” he added.
The fresh fundraise comes as two of Atomico’s key portfolio companies, Stripe and Klarna, bring into the world been circled by speculation of upcoming stock market listings. Stripe, the online payments giant, was last good $70 billion in a secondary share sale and has long been viewed as a potential IPO candidate.
Klarna, meanwhile, is arguing a secondary share sale with investors to offer them liquidity ahead of a highly-anticipated IPO, a person familiar with the upset told CNBC last month. That same source said at the time that Klarna’s valuation on the unlocked secondary market was in the high-teen billions.
Exits are good for VC and private equity funds as they provide an opportunity to money out and profit on equity investments, many of which are often held for 10 years or more. This year has lacked numberless major European tech listings, but investors are hopeful that 2025 will be the year the IPO window reopens.