Major VC firm Atomico sets sights on both early-stage innovation and later-stage expansion with two new funds amidst evolving European market dynamics.
As European startups navigate the post-pandemic tech landscape, Atomico, one of the continent’s leading venture capital firms, has raised $1.24 billion in new funding to support early- and growth-stage companies.
Atomico has split its largest-ever fundraise across two distinct pools, a strategic move to cater to both emerging ventures and more established businesses.
Atomico’s latest fundraise consists of $485 million dedicated to Series A startups under “Atomico Venture VI,” and a separate $754 million for Series B through pre-IPO investments, labeled “Atomico Growth VI.” With this differentiation, the firm is positioning itself to balance its traditionally early-stage focus with increased support for later-stage companies as they scale.
This dual-fund approach highlights a cautious shift in the venture capital space, where investors are increasingly hesitant to back pre-profit, early-stage companies. Atomico’s structure allows risk-averse limited partners (LPs) to invest in proven growth-stage businesses, while still keeping a foothold in the more volatile early-stage market.
This move comes at a critical juncture for European startups, as global venture capital continues to experience a downturn. Atomico’s decision to double down on both ends of the funding spectrum could offer insights into how VCs are adapting to a cooling market.
Founded in 2006 by Skype co-founder Niklas Zennström, Atomico has steadily grown its fund sizes over the years, culminating in this record $1.24 billion raise. Despite falling 20% short of its initial target for early-stage investments, Atomico exceeded expectations on the growth-stage side, underscoring the growing need for later-stage capital as startups mature.
This fundraise also follows a challenging year for European tech, with Atomico’s own research indicating that startup funding in the region halved in 2023 due to global economic pressures. However, with new funds from major firms like Accel and Balderton, and signs of stabilization, there are glimmers of optimism in the European tech ecosystem.
Balancing Growth and Early-Stage Bets
With 21 investments already made across both funds, including early-stage backing for Neko Health, Ben, and Strise, and growth-stage commitments to companies like DeepL and Pelago, Atomico is positioning itself as a key player across the startup lifecycle. The firm's ability to deploy capital flexibly, from seed to pre-IPO, offers a clearer view of where the market’s appetite for risk—and reward—currently stands.
