Skype’s co-founder’s VC firm Atomico closes in on $1.2 billion fund

LONDON — Atomico, the London-based venture capital firm set up and led by Skype co-founder Niklas Zennstrom, is close to announcing a new start-up fund worth around $1.2 billion, according to industry sources familiar with the matter.

The investment company has almost finished raising an “early-stage” fund of around $400 million to back young start-ups, two venture capitalists who did not wish to be named due to the sensitive nature of the discussions told CNBC.

They added that Atomico is also working on a “late-stage” fund of around $800 million to back more established start-ups that require larger amounts of capital to continue growing.

Atomico did not respond to a CNBC request for comment.

A third CNBC source, a start-up executive who also did not wish to be named due to the nature of the discussions, told CNBC that Atomico informed his company that it is in the process of raising more capital from limited partners.

Several other VC sources, who weren’t aware of any specific fundraising plans, said it wouldn’t surprise them if Atomico announced a new fund soon. “I think pretty much the world and his dog is raising right now,” one said.

Another added: “(It) wouldn’t be a surprise. Competition is brutal in VC world.”

It’s unclear how much more capital Atomico needs to raise for each of the funds and when the funds will be officially announced.

Atomico, which is headquartered in Mayfair, has raised five funds to date. The last one was an $820 million fund that was announced in February 2020.

It has used its previous funds to back some of the world’s most valuable start-ups including fintech titans Stripe and Klarna. Other investments include flying car start-up Lilium and artificial intelligence chip designer Graphcore.

The amount of money flowing into European start-ups has continued to rise over the last decade and many big U.S. VC firms including Sequoia Capital and Bessemer Venture Partners have set up bases in London to ensure they don’t miss out on deals.

Several of Atomico’s competitors have also announced significant funds in the last year and new VC firms are also being created.

On Wednesday, rival firm Balderton Capital, which is also based in London, announced a $600 million early-stage funding on Wednesday, while Sofinnova Partners announced it has raised 150 million euros ($169 million) in capital for its early-stage environmental impact fund.