Atomico Raises $1.24 Billion to Fuel European Tech Startups Amid Funding Slowdown
Amidst a cooling European tech landscape, Atomico, a prominent early-stage investor in European tech companies like Stripe and Klarna, has announced the launch of two new funds totaling $1.24 billion. This significant investment comes at a time when venture funding for European tech startups halved in 2023, indicating a shift in the market that demands strategic maneuvering.
Key Takeaways:
- Atomico’s new funds will focus on supporting emerging and growth-stage startups across Europe, showcasing a continued commitment to the region’s tech ecosystem.
- The launch of these funds signifies a potential inflection point for the European tech sector, which has been grappling with a decline in valuations and layoffs.
- Atomico, known for its investment in notable companies, aims to empower European startups with the resources to achieve global scale, fostering a competitive landscape.
Navigating a Changing Landscape
The European tech sector experienced a significant slowdown in 2023, with venture funding declining to $45 billion compared to $82 billion in 2022. This downturn reflects a shift from the inflated valuations of the pre-pandemic era, leading to a more cautious investment climate.
However, despite this challenging environment, Atomico’s substantial investment in new funds underscores its belief in the long-term potential of European tech. The firm views this moment as an opportunity to nurture promising startups and help them navigate the turbulent market conditions.
Investing in the Future of European Tech
Atomico’s new funds are structured with two distinct focuses:
- A $754 million growth-stage fund targets startups raising Series B to pre-IPO financing, providing crucial capital for expansion and scaling.
- A $485 million early-stage fund supports aspiring startups in their nascent stages, bolstering their initial growth trajectory.
Niklas Zennström, CEO of Atomico and co-founder of Skype, highlighted the growing maturity of European tech and the need for investors who can provide long-term support: "European technology is coming of age. Meeting this opportunity requires ambition, hustle and commitment from founders, who need investors with the experience and perspective to see beyond market cycles."
A Strategic Move Amidst IPO Speculation
The launch of these funds coincides with speculation surrounding upcoming stock market listings for two of Atomico’s prominent portfolio companies: Stripe and Klarna. Both companies have achieved remarkable success and are widely considered potential IPO candidates.
Stripe, the online payments giant, is valued at $70 billion and has generated significant interest from investors. Klarna, a leading "buy now, pay later" platform, is exploring a secondary share sale to provide liquidity to investors ahead of its highly anticipated IPO.
While the IPO market for European tech companies has been subdued in 2024, investors anticipate a resurgence in 2025. Atomico’s strategic moves, coupled with the potential for major exits from its portfolio companies, suggest a period of renewed growth and momentum for the European tech sector.
A Catalyst for Innovation and Growth
Through its substantial investment, Atomico is demonstrating its continued confidence in the future of European tech. The firm’s proactive approach, focused on both early-stage and growth-stage startups, aims to:
- Foster a vibrant and competitive European tech landscape.
- Empower innovative startups with the resources they need to reach global scale.
- Drive continued investment in European innovation, creating a positive ripple effect across the ecosystem.
Atomico’s commitment to the European tech scene signals a belief in its resilience and long-term potential. As the sector navigates a dynamic market environment, Atomico’s strategic investment serves as a catalyst for continued growth and innovation.
