Investment

Billionaire-backed fund raises record amount – much from family offices – to invest in venture

Atomico, the venture-capital business owned and led by Skype co-founder Niklas Zennström has raised a record $820 million for its fifth fund, against its $750 million target.

London-based Atomico said family offices were among the new investors in a buoyant European VC market but did not confirm the scale of their involvement. 

Last year, Atomico published a survey which said 65% of family offices in Europe had raised their interest in venture capital over a year, as reported in Family Capital.

Atomico has pledged to develop communications between corporate founders and backers to tease out risks over the long-term, including impacts on society and the environment. 

Minimum standards for diversity and inclusion have been written into the fund’s terms of engagement. Both measures are likely to appeal to family offices, who like to see a hands-on approach.

The Atomico fundraising also shows the way successful VC companies enrich founders and team members who go on to invest their gains in new fundraisings.  This circular motion is one of the factors which has helped fuel the buoyant VC market in the US. 

Atomico said investors in the fund included executives from Adyen, Klarna, Transferwise, Spotify, Skype, Supercell and Zoopla. 

Zennström and Atomico have some top Swedish entrepreneur and family business connections. Before founding Skype,  Zennström worked for the Swedish family investment group Kinnevik. Owned by the Stenbeck family, Kinnevik is one of the most dynamic venture investors in Europe. 

On Atomico’s staff is Joen Bonnier, a scion of the Bonnier family, who own the eponymous Swedish publisher. Joen is also well connected to other Swedish family dynasties including the Rausings, owners of the Tetra Pak empire. Last year, the Atomico partner invested in a fintech startup called Klarna with Magnus Rausing, the son of Jörn Rausing, who is worth more than $10 billion. Magnus runs a venture fund from his base in New York City. 

Although they aren’t about to say, members of these Swedish family business dynasties are likely to have shown more than a passing interest in Atomico’s latest fund. 

A survey sponsored by London-based Talis Capital has identified 18 backers of tech-driven ventures in Europe following their liquidity events, including Zoopla’s Alex Chesterman and Spotify’s Sophia Benz.

Atomico’s fund is the largest raised by an independent VC firm in Europe, which saw an all-time record of $11.2 billion raised last year, according to PitchBook.  

Late in 2019, Northstone Ventures and Balderton Capital raised $500 million and $400 million in Europe respectively. VC investments totalled a record $32.5 billion, against $24.3 billion the previous year. US investors are increasingly involved in Europe although corporate exits suffered a sharp decline as stock market IPOs took a tumble.

Growing European fundraising marks a sharp contrast to setbacks in China, where Pitchbook has recorded a decline in VC activity, due to the impact of the coronavirus. From the start of the year to February 12, the number of deals has fallen from 381 to 137 year-on-year. Capital invested fell from $4.05 billion to $1.37 billion.

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