Atomico, a European venture capital company, has raised $1.1bn in new funding for start-ups. This is despite a general slowdown in technology.
According to US regulatory filings the London-based group raised fresh money for its new venture and Growth funds. It is now close to its $1.35bn goal for both vehicles.
Investors are retrenchment due to higher interest rates, falling valuations of technology companies and lower valuations.
According to PitchBook research, European venture capital funding of start-ups has slowed down in the first six months of this year. The total value of these deals is down by more than 60% compared to the same period last year.
The amount of money invested by European Venture Capitalists in the second quarter was down 40% year-on-year to $20 billion. North America saw investment drop by almost half to $42bn in the same time period.
Atomico, founded in 2006 by Skype’s Niklas Zennstrom, has become one of Europe’s most prolific technology investors. It has backed over 130 start-ups.
The company has invested in Klarna (a group that provides buy-now, pay-later technology) and Lilium (a flying electric car startup). Atomico has raised $820mn in its previous fund, 2020, for its $5bn management.
I thought that there was a lot of potential for creating more Skype-like companies in Europe. Let’s end the [Silicon Valley] Monopoly. Zennstrom said recently in an FT Lunch with the interview that we could build the exact same thing, or even better, in Europe.
Atomico’s latest funding is among the biggest in Europe this year. The VC firm Highland Europe raised €1bn in January. Last month, London-based software investors Dawn Capital raised $700mn.
Over the last 18 months, venture capitalists faced a variety of challenges including an increase in inflation. The private market valuations of several notable start-ups have been marked down dramatically to reflect the tough macroeconomic environment.
The lack of initial public offering (IPOs) has also hampered the fundraising market for venture investors. These IPOs are an important route for these managers to exit their investment and generate returns for institutional backers.
The choppy IPOs of a few notable technology companies in the US last month, including Instacart (an online grocery delivery service), have dampened hopes for a recovery and led venture capitalists to advise start-ups that they should delay listing until interest rates begin to plateau in the US.
Atomico has declined to comment.