Atomico, one of Europe’s most prominent VCs and a backer of Germany’s AI startup DeepL and Spotify founder Daniel Ek’s healthtech Neko Health, has raised $1.24bn in fresh funding for European startups.
The capital is divided between a $485m early-stage fund that will focus on Series A (but also include some opportunistic seed investments) and a $754m growth fund targeting Series B to pre-IPO.
It falls just short of being the biggest VC fund focused solely on Europe, with fellow London-based firm Balderton raising $1.3bn across two new funds last month.
Atomico, founded in 2006 by Skype cofounder Niklas Zennström, last raised a $820m fund in 2020 to back European startups from Series A and beyond. Combined, the two new funds constitute Atomico’s largest fundraise to date — and the first time that the firm formally separates early-stage from growth investments with a dedicated team for each stage.
The funds are less, however, than the combined target of $1.35bn that appeared in previous US regulatory filings that were first reported by the Financial Times.
The London-HQ'ed firm received backing from the European Investment Fund (EIF), Europe’s largest fund of funds, as part of the organisation’s European Tech Champions Initiative (ETCI) — which invests in firms raising funds of €1bn or more that are able to back European “tech champions” in Series B rounds and above.
What will the funds be used for?
Atomico says that the new funds will focus on European startups.
“European technology is coming of age,” said Zennström. “Data shows Europe is leading the world at the early stage with a wealth of new startups. Our new funds bring them essential fire power to level up and achieve global scale — from Europe.”
The firm’s 2023 report on the state of Europe’s tech sector shows that although funding for startups more than halved last year to $45bn compared to 2021, there are also more new first-time founders in Europe than there are across the Atlantic, and the region attracts more talent from the US than it loses to it.
Several high-profile VCs have recently raised megafunds to back European tech. In May, London-based Accel announced a new $650m fund to back early-stage companies in Europe and Israel; and in August Balderton raised $1.3bn across two new funds focusing on European startups from early stage to IPO.
Atomico says that the new capital will be deployed across various verticals. The investor has already backed 21 companies across the two funds, including AI translation startup DeepL and body scanning clinic Neko Health, but also Zurich-based AI startup Lakera, UK virtual clinic provider Pelago and German IT management platform Deeploi.
