As London-based VC firm Atomico closed Atomico V on USD820 million today (18/02/20), Atomico’s head of IR tells PEW the firm has “increased its focus over the years to really double down its efforts in Europe.”
As London-based VC firm Atomico closed Atomico V on USD820 million today (18/02/20), Atomico’s head of IR tells PEW the firm has “increased its focus over the years to really double down its efforts in Europe.”
Investors in the fund include global institutional investors, both existing and new, including (mainly European) pension funds, fund-of-funds, sovereign wealth funds, insurance companies, endowments, banks, family offices and government-backed entities from across the world.
British Patient Capital, a subsidiary of the British Business Bank, has committed USD50 million. In terms of geography, the backers are mainly European, Asian, and “a handful of American investors,” said Atomico. The funding round took around a year to complete, according to the firm.
The fund will target companies that facilitate “transformational change,” within sectors including healthcare, the technology to transform the way we grow our food, to housing, and every aspect of technology, said Camilla Richards, partner and head of investor relations at Atomico. She oversees fundraising and the firm’s relationships with its investors globally.
“We seek to invest in companies that can have a big scale commercial outcome, as we believe that profit and purpose are mixing with all things,” so in investing in a responsible way we can create a better outcome for everyone,” explained Richards.
Atomico V doubles down on the firm’s core strategy: to partner with European founders at Series A, with a fund size capable of investing at Series B and C into breakout companies. The closure of the fund brings the firm’s total assets under management to USD2.7 billion.
“There’s an increased new amount of VC investors that are looking to invest in European companies. That creates additional capital coming in, which means that we have to continue to work to access the best opportunities. We have a strong platform that is playing to our advantage,” she added.
Since Atomico was founded 14 years ago the firm has focused on building a platform which is backed by people who have founded technology companies themselves, said Richards.
Alongside global institutional investors, the fundraise includes a number of founders and early team members from European start-ups including Adyen, Klarna, Transferwise, Spotify, Supercell, Skype and Zoopla.
“They’ve held leadership positions in global technology companies themselves and they work very closely with our portfolio companies to help them scale in different ways, helping them to expand into new markets,” she said.
“Many in our investment team have either entrepreneurial or operational experience. I think that helps us in creating a very different relationship with the founders. We understand the challenges, but also the opportunities they face, and that means we can work with them in a much more collaborative and positive way to help them to generate a successful outcome,” continued Richards.
Atomico V investments to date include Infarm, HealX, Spacemaker, Kheiron Medical, Peakon, Scoutbee, Koru Kids, Automation Hero and AccuRx.
The fifth fund is “very much a continuation” of Atomico’s previous fund, in Richards’s view. “We’ve seen that the European ecosystem is capable of building a company of sizeable outcome. The opportunities here have only got stronger. That means we’ve increased our focus over the years to really double down our efforts here in Europe,” she comments.
At USD820 million the fund has the capital to support later-stage funding rounds as well. “The institutional support in Europe continues to increase and what we’ve seen is that many of the investors who came into our previous fund, fund four, have continued to build out their programme, and that they are continuing to increase the European investor programmes more broadly as well,” concludes Richards.
Atomico’s current portfolio includes companies across sectors such as finance, healthcare, AI & machine learning, agriculture and business productivity.
Atomico recently published it’s Conscious Scaling programme, an open-sourced framework for founders to identify and mitigate long-term risks, which requires companies to commit to implementing a diversity and inclusion (D&I) policy as part of their investment term sheets, and recently published a diversity and inclusion guidebook to help founders build responsible companies that last.
“Venture capital has a critical part to play in a world with so many urgent challenges,” said Atomico founding partner and CEO Niklas Zennström.
“We’re looking for the ambitious mission-driven founders behind the companies with visionary solutions to seemingly intractable problems. We’re guided by a simple belief: profit and purpose are mutually reinforcing, not mutually exclusive,” he added.
Catherine Lewis La Torre, CEO of British Patient Capital who is an LP in Atomico V, said: “Our mission is to enable long-term investment in innovative companies across the UK, led by ambitious entrepreneurs who want to build successful world-class businesses.”
“The Atomico team has backed some of the UK’s most promising early-stage companies and supported these with both the capital and operational expertise to scale internationally.
With a fund size capable of investing at Series B and beyond, Atomico will be able to support its most promising companies throughout the growth stage, and its focus on helping founders build responsible companies that last, aligns well with British Patient Capital’s mandate.”
