Niklas Zennström, Founder, Atomico via atomico.comAtomico, a global investment firm based in London, dedicated to empowering disruptive tech companies to achieve worldwide growth, on Monday announced the launch of two new funds totaling $1.24 billion. An early supporter of European tech giants like Stripe and Klarna, Atomico will utilize these funds to fuel the expansion of emerging and growth-stage startups in the technology sector.
The firm’s sixth fund launch brings a timely boost to Europe’s tech sector, which has been struggling with declining valuations and widespread layoffs. The new funds comprise a $754 million growth-stage fund for startups seeking Series B to pre-IPO financing, alongside a $485 million early-stage fund, injecting vital capital into the ecosystem.
European tech startups experienced a significant decline in venture funding, plummeting to $45 billion in 2023, down from $82 billion the previous year, according to Atomico’s report. This marked a return to pre-pandemic levels, reversing the rapid growth in tech valuations seen during the pandemic era, as noted by Atomico.
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Europe’s tech industry reached a combined valuation of over $3 trillion in 2023, despite experiencing a significant downturn in 2022, which saw $400 billion erased from its market capitalization due to a steep decline in tech valuations.
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Atomico’s new funds represent a significant milestone, with a 50% increase from the $820 million raised in 2020 for Fund V. As a leading venture capital firm founded by Skype co-founder Niklas Zennström in 2006, Atomico continues to support Europe’s most promising tech companies, solidifying its position as a key player in the industry.
“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 cycle.” Zennström said in a statement
“Data shows Europe is leading the world at the early stage with a wealth of new start-ups. Our new funds bring them essential fire power to level up and achieve global scale – from Europe,” he added.
Atomico’s recent fundraising coincides with growing speculation surrounding the potential stock market listings of two of its flagship portfolio companies, Stripe and Klarna. Stripe, a leading online payments processor, boasts a valuation of $70 billion following its latest secondary share sale, fueling long-standing rumors of an impending initial public offering (IPO).
Klarna is reportedly exploring a secondary share sale to provide investors with liquidity options before its highly anticipated IPO. According to a source familiar with the matter, Klarna’s valuation on the open secondary market is estimated to be in the high teen billions. This move aims to give investors a chance to cash out before the company’s expected IPO.
It is worth noting that despite a scarcity of major European tech listings this year, investors remain optimistic that 2025 will bring a resurgence in IPO activity, providing a welcome opportunity to cash out and reap rewards.
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