Atomico, a London-based venture capital firm, has closed new funds totaling $1.24 billion to back early- and growth-stage startups across Europe. The firm has split the funds into two: “Atomico Venture VI” at $485 million for Series A-stage and seed companies, and “Atomico Growth VI” at $754 million for Series B through pre-IPO. Raising and allocating money from separate funds is typical among venture capital firms.
However, Atomico’s decision to close two separate funds led by different teams is notable. The firm has historically favored earlier funding rounds while occasionally participating in later stages where it made sense. Now, it’s positioning itself to focus equally on the later stages of a startup’s journey with a dedicated fund.
This approach might also address some investors’ hesitation to put money into fledgling pre-profit companies. By setting up two separate funds, it becomes easier for Atomico to attract contributions from more risk-averse limited partners by enabling them to invest in more stable businesses, rather than a single diverse fund spanning early to late-stage companies. The funds’ closing comes amid a challenging funding environment.
Atomico supports European startup innovation
Atomico’s annual reports on the European technology ecosystem often highlight the market’s health. The most recent report indicated that European startup funding has been impacted by geopolitical events, inflation, and interest rate changes.
The market dynamics and investment data were also skewed by the global pandemic in 2021 and 2022. Atomico initially launched in 2006 with a $73 million fund and has grown significantly over the years. Its latest fund surpasses its last by more than 50%, though filings with the Securities and Exchange Commission last year showed it was aiming for higher targets for its venture and growth funds.
While the growth fund exceeded its target, Atomico fell short of its venture target by nearly 20%. This shortfall suggests waning investor enthusiasm for backing new startups, which could reflect broader trends in the market. Atomico has already made 21 investments across the two new funds, including several through Atomico Growth VI and leading Series B rounds.
Meanwhile, Atomico Venture VI has made multiple investments since its launch in early 2022. Overall, Atomico’s dual-fund strategy appears to be a strategic move to balance risks and cater to varying investor preferences, positioning the firm to continue supporting European startup innovation through both early and growth-stage funding.
