Atomico, the VC firm co-founded and led by Niklas Zennstrom of Skype fame, has just announced its third and biggest fund, $475 million, which the firm says it will use mainly for later-stage rounds in startups to help them scale. Taking a page from Zennstrom’s own entrepreneurial trajectory — Skype started in Estonia — Atomico has put a lot of emphasis on finding and funding startups outside of Silicon Valley, and that is exactly where it plans to invest this latest fund, too. “This is absolutely global,” a spokesperson told me, “but primarily outside Silicon Valley.”
Total funds under management by Atomico are at $850 million.
Atomico notes that this third fund is three times the size of its previous fund and was oversubscribed — a testament to the company’s track record, but also to how investors are increasingly looking beyond tech’s epicenter to find new opportunities. This was not the case a decade ago.
“Great companies can come from anywhere,” Zennstrom noted in a statement. “Ten years ago people thought you had to be in Silicon Valley to build a global technology business. That is no longer the case. We see entrepreneurs from all over the world achieving global success faster than ever before and across every sector of the global economy. Our new fund is aimed squarely at this opportunity. We will help entrepreneurs, primarily outside Silicon Valley, disrupt established industries and grow the next generation of global businesses wherever they are.” We will hopefully be speaking to Zennstrom when he wakes up (ironically, he’s in SV right now) and will update the post with more from him when we do.
The fact that this latest fund focuses on scale says something about how the technology ecosystem is maturing outside of Silicon Valley. Last week we wrote about how 6Wunderkinder has closed a $19 million Series B round to expand globally, and this was a significant development investment-wise for a couple of reasons. One was that this represented Sequoia’s first German investment (a sign of people looking outside of Silicon Valley for the next big thing); but also that interesting saplings like Wunderlist (its main product) are now taking root and growing. This is also what Atomico wants to tap into.
“Technology has simplified many things, but when it comes to expanding internationally, the business and cultural challenges remain hard — most people underestimate just how hard. But it’s vital to building lasting success at scale,” the company writes in the blog post.
Atomico has had a great run of late. It was an investor in both Supercell and the Climate Corporation, $1 billion+ transactions for the firm. When Softbank and GungHo bought a 51% stake in the gaming company Supercell in October for $1.5 billion, all shareholders sold 51% of their shares to the pair in the process. Climate Corporation was bought by Monsanto for $1.1 billion also in October.
It has also made significant inroads outside of Europe into markets like Latin America, particularly Brazil.
One of the major investors in this current round is the European Investment Fund. Matthias Ummenhofer, Head of Venture Capital at the European Investment Fund, said in a statement: “Great Venture Investors can come from anywhere too and Atomico is the best proof that this can also happen in Europe. The Atomico team is setting global standards and together with its portfolio companies has brought Europe back on the radar of international Venture Investors and corporates. We are proud to be part of the journey!”