Today confidence in the UK Tech Sector was further reinforced with London venture capital firm Atomico closing its fifth fund, Atomico V, at $820 million. The fund, committed to helping European founders as part of Atomico VC’s wider strategy of “partnering with game-changers”, demonstrates the VC powerhouse’s ability to empower its founders. The fund closes in the wake of data released by the UK Government and Tech Nation indicating that the UK tech sector received a record $13.2B (£10.1B) in Venture Capital investment in 2019.
To put the investment into a more global context it shows that the UK tech sector lags behind our American and Chinese counterparts where VC investment into tech startups soars to £116B for the USA and $33.5B for China. In a recent survey conducted by a UK Technology firm however, 87% of entrepreneurs surveyed stated they would prefer to take money in from European VC partners versus China or America. In the wake of the Coronavirus, this data does feel semi fortuitous for European investors seeing a massive slow in the growth of China’s economic development plans. Is this the first of many steps we will see from European and American VC firms to capitalise on the tech talent and economic challenges facing the worlds second economic heavy weight?
The fund is looking for ambitious European partners who are focused on delivering positive transformational change across society that really stand out from the crowd.
“Venture capital has a critical part to play in a world with so many urgent challenges. 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.” Atomico Founding Partner and CEO Niklas Zennström.
The firm will support founders across scaling their businesses successfully and sustainably by offering them more than just financial capital. Atomico recently published its Conscious Scaling programme, an open-sourced framework for founders to identify and mitigate long-term risks. The program requires founding management teams 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.
Atomico V Fund is made up of a broad mix of funders including; pension funds, fund-of-funds, sovereign wealth funds, insurance companies, endowments, banks, family offices and government-backed entities from across the world. A number of founders and early team members from some of Europe’s most successful startups of the past decade – including Adyen, Klarna, Transferwise, Spotify, Supercell, Skype and Zoopla among others – have also invested as individual LPs in this fund.
One of Atomico’s UK portfolio companies is Bristol Founded Graphcore, which, is arguably changing the future of computing through its advanced AI. The UK company has developed one of the most advanced intelligence processing units in the world. The technology is now used in machine learning globally to help power driverless cars and robots and escalates Graphcore as one of the UK’s Unicorns. Again we see Atomico’s commitment to providing more than just capital as CEO and Co-founder Nigel Toon comments “Atomico is a fantastic partner for Graphcore. We are in the process of building a global technology business that is based in Europe and Atomico’s strategy of fully supporting ambitious European technology companies to grow to a massive scale, is perfectly aligned. We have been impressed by their long term focus and their incredibly strong support for our mission to build a new type of processor for AI that allows innovators to achieve the next breakthroughs that will expand human potential.”
“We have been impressed by their long term focus and their incredibly strong support for our mission.” CEO and co-founder of Graphcore Nigel Toon
Another Atomico V investment is Koru Kids, the London based childcare service which is disrupting the expensive business of childcare helping parents with after school nannies and nanny sharing opportunities. Rachel Carrell the found of Koru Kids explains “Having Atomico as a backer has helped us hire some of the top people in London. Atomico has also under-promised and over-delivered in terms of the support that Atomico provides startups. Niall, the Atomico Partner on our board, has been invaluable in helping us think through hard problems. He brings his relevant marketplace expertise to helping us tackle the huge world problem of how to improve the well-being of families through better childcare.”
“Having Atomico as a backer has helped us hire some of the top people in London.” Founder of Koru Kids Rachel Carrell
Only time will tell if we see giants similar to existing founding partners such as Skype, Stripe and Klarna add to the ranks of the Atomico global unicorns that drive this VC forward year on year.