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European venture capital firm Atomico has defied the overall slowdown in the technology industry to raise $1.1 billion worth of new funding to invest in new startups.
The London-based group has raised new capital through its new venture and growth funds, closing in on its $1.35 billion target for the two funds, according to filings with U.S. regulators.
The new capital comes at a time when venture capital firms are finding it more difficult to raise money as rising interest rates and falling public valuations of new startups cause investors to tighten their belts.
PitchBook research shows that European venture capital investment in new startups slowed in the first half of this year, with the total value of such deals falling by more than 60% compared with the same period last year.
In the second quarter, European venture capital investment fell by 40% year-on-year to about US$20 billion. In North America, investment almost halved to $42 billion over the same period.
Founded in 2006 by Skype founder Niklas Zennström, Atomico has become one of Europe’s most prolific technology investors, having invested in more than 130 startups.
Companies it has invested in include buy now, pay later fintech group Klarna and electric flying car startup Lilium. Atomico manages $5 billion and previously raised $820 million for its fifth fund in 2020.
“I think Europe has the potential to create more companies like Skype. Let’s break the (Silicon Valley) monopoly. We can build the same thing in Europe, maybe even better,” Zennström said in a recent interview with the Financial Times.
Atomico’s new funding ranks among the largest of its kind in Europe this year. In January, venture capital firm Highland Europe closed a new €1 billion fund, while last month London-based software investor Dawn Capital raised $700 million.
Over the past 18 months, venture capitalists have had to contend with a number of challenges, including rising inflation. Private market valuations of several high-profile startups, including Turkish express company Getir, have been slashed to reflect tough macroeconomic conditions.
The fundraising market for venture capitalists is also hampered by a lack of initial public offerings, a key way for such managers to exit investments and generate returns for their institutional backers.
Volatility in the initial public offerings of several high-profile U.S. tech companies last month, including online grocery delivery company Instacart, dampened hopes for a rebound and led venture capital firms to advise startups to delay listings until the U.S. Interest rates are starting to stabilize.
Atomico declined to comment.
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