Atomico, the venture capital firm founded by Skype co-founder Niklas Zennström, announced the launch of two new funds worth $1.24 billion to support emerging and growth-stage European tech startups. The funds, unveiled Monday, aim to inject much-needed capital into a tech sector that has experienced a downturn in valuations and widespread layoffs.

The sixth fund batch from Atomico consists of a $754 million growth-stage fund for startups seeking Series B to pre-IPO financing and a $485 million early-stage fund. This marks a significant boost for Europe’s tech ecosystem, which has seen venture funding nearly halve to $45 billion in 2023, compared to $82 billion in 2022. The steep decline followed an era of rapid valuation growth during the pandemic, but more recent years have brought challenges. Despite this, European tech companies collectively reached a value exceeding $3 trillion by the end of 2023.

Atomico’s new funds represent a more than 50% increase from the $820 million raised in its previous round in 2020. As a key player in the European tech scene, Atomico has supported several prominent firms, including Stripe and Klarna. In a statement, Zennström emphasized the importance of this new capital injection, stating, “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.”

The fundraising arrives amid speculation of potential stock market listings for some of Atomico’s portfolio companies. Stripe, valued at $70 billion in a recent secondary share sale, is seen as a likely candidate for an initial public offering (IPO), while Klarna is exploring a secondary share sale as part of its IPO plans.

Investors are hopeful that major European tech listings will resume in 2025, providing lucrative exit opportunities for venture capital and private equity funds.

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