Skype founder's VC firm raises $1.24 billion to back European tech startups

LONDON — Atomico, an early investor in top European technology firms from Stripe to Klarna, announced Monday the launch of two new funds worth $1.24 billion to back emerging and growth-stage startups in the sector.

The launch of Atomico's sixth batch of new funds, comprised of a $754 million growth-stage fund for startups raising Series B to pre-IPO financing and a $485 million early stage fund, marks a breath of life for a European tech industry that has been reeling from a slide in valuations and mass layoffs.

Venture funding for European tech startups nearly halved to $45 billion in 2023, compared to $82 billion in the previous year, according to a report penned last year by Atomico. This decline was a reversal to pre-pandemic years which saw a wild rise in tech valuations, Atomico said at the time.

The combined value of all private and publicly listed tech companies in Europe totalled more than $3 trillion in 2023. In 2022, Europe's tech sector saw $400 billion wiped off its overall market capitalization amid a sharp slide in tech valuations.

The size of Atomico's new funds marks more than a 50% increase on the $820 million it raised for its last round of funds, Fund V, in 2020. The firm, founded in 2006 by Niklas Zennström, a co-founder of Microsoft-owned video calling app Skype, has backed some of the most well-known companies in Europe's tech scene.

"European technology is coming of age. Meeting this opportunity requires ambition, hustle and commitment from founders, who need investors with the experience and perspective to see beyond market cycles," Zennström said in a statement Monday.

"Data shows Europe is leading the world at the early stage with a wealth of new start-ups. Our new funds bring them essential fire