Anamika Dey, editor
Brief news
- Atomico, a prominent European technology investor, has announced the establishment of two new funds totaling $1.24 billion to support nascent and growth-stage businesses in the industry.
- The funds include a $754 million growth-stage fund for startups raising Series B to pre-IPO financing and a $485 million early stage fund, providing a boost to the European tech industry which has been experiencing job losses and declining valuations.
- European tech funding decreased by nearly half in 2023, but Atomico’s new funds represent a 50% increase from its previous round of funds in 2020, signaling a positive outlook for the industry.
Detailed news
LONDON — On Monday, Atomico, a pioneering investor in prominent European technology companies such as Klarna and Stripe, disclosed the establishment of two new funds totaling $1.24 billion. These funds are intended to support nascent and growth-stage businesses in the industry.
Atomico’s sixth batch of new funds, which includes a $754 million growth-stage fund for startups raising Series B to pre-IPO financing and a $485 million early stage fund, represents a breath of fresh air for the European tech industry, which has been experiencing significant job losses and a decline in valuations.
According to a report published by Atomico last year, venture funding for European tech firms decreased by nearly half to $45 billion in 2023, from $82 billion the previous year. At the time, Atomico stated that this decline was a reversal from the pre-pandemic years, during which technology valuations experienced a sudden surge.
In 2023, the aggregate value of all privately held and publicly traded technology companies in Europe exceeded $3 trillion. In 2022, the technology sector in Europe experienced a $400 billion decline in its overall market capitalization as a result of a rapid decline in tech valuations.
The new funds obtained by Atomico represent a more than 50% increase from the $820 million it raised for its most recent round of funds, Fund V, in 2020. Niklas Zennström, a co-founder of Skype, a video calling app owned by Microsoft, established the organization in 2006. Since then, it has provided financial support to numerous prominent companies in Europe’s technology sector.
“European technology is maturing.” Zennström stated in a statement on Monday that founders must possess ambition, drive, and commitment in order to capitalize on this opportunity. Additionally, they require investors who possess the experience and perspective to see beyond market cycles.
“Data indicates that Europe is currently leading the world in the early stages of innovation, with a plethora of new start-ups.” He also stated that our new assets provide them with the necessary firepower to rise to the next level and attain global scale, all from Europe.
Stripe and Klarna, two of Atomico’s most significant portfolio companies, have been the subject of speculation regarding potential stock market listings. Consequently, the company has initiated a new fundraising campaign. Stripe, the online payments behemoth, was most recently valued at $70 billion in a secondary share sale and has been considered a potential IPO candidate for some time.
In the interim, Klarna is in the process of negotiating a secondary share sale with investors to provide them with liquidity in advance of a highly anticipated IPO, according to a source who spoke with CNBC last month. At that time, the same source stated that Klarna’s valuation on the open secondary market was in the high-teen billions.
Venture capital and private equity funds benefit from exits, as they offer the chance to profit from equity investments that are frequently held for a period of 10 years or more. However, investors are optimistic that the IPO window will reopen in 2025, as there have been a scarcity of significant European tech listings this year.
Source : CNBC News
