Atomico closes fifth-generation fund on $820m

Atomico V was announced in January 2019 with a target of $750m. The fund held a first close in Q1 of 2019. Atomico partner Camilla Richards said: "We did have to turn away some capital."

The fund close is the largest of any Europe-based venture fund so far in 2020, according to Unquote Data.

Richards said of the fundraise: "During the past five years or so, LP sentiment has shifted from never intending to invest in European venture to LPs taking their first steps. Interest in the leading European venture managers has increased."

Atomico's previous fund, Atomico IV, closed in 2017 on $765m and is now fully deployed.

Atomico V is structured as a Luxembourg SCSp.

Proskauer provided legal advice. The firm did not use a placement agent.

Venture in 2019 proved resilient to political uncertainty, particularly in the late-stage venture sector. European venture funds that held successful closes in the past year include EQT Ventures II on €660m, Northzone IX on €500m and Idinvest Digital Fund III on €350m.

Venture firms have also made a strong start to 2020 with several holding closes across Europe. Felix Capital closed its third-generation fund on $300m, while France-based debut venture fund Jeito held a first close on €200m.

The VC secondaries market has also seen some activity in 2020, with the close of Greenspring Associates' VC secondaries fund on $800m. The transacted value of venture secondaries amounted to $5.67bn in 2018, compared with the $47.4bn in buyout secondaries, according to Campbell Lutyens.

Investors
LPs in the fund include institutional investors, both existing and new, including pension funds, funds-of-funds, sovereign wealth funds, insurance companies, endowments, banks, family offices and government-backed entities from across the world. Richards said: "We're very focused on making sure we have a well-diversified investor base. There was interest from new and existing investors, and a significant re-up rate."

The European Investment Fund (EIF) committed to the fund, as did British Patient Capital with a commitment of $50m, according to Unquote Data. Founders and team members from companies including Adyen, Klarna, Transferwise, Spotify, Supercell, Skype and Zoopla also invested as individual LPs in this fund.

The fund has investors from Europe, Asia and a handful from North America. Richards said: "North American investors are a little bit less likely to invest in European venture because they've got established venture programmes with lots of demand for capital in their own backyard, so it's harder to draw capital from them."

Investors in the fund's predecessors include EIF with a commitment of €114m, South Yorkshire Pensions Authority with a commitment of $15m, Finnish sovereign wealth fund Tesi with a commitment of €6.8m and Sweden-based pension fund AP3 with $30m, according to Unquote Data.

Investments
The fund will commit up to $15m to series-A funding rounds, and for series-B and series-C the equity cheque will vary. Richards says: "The fund will allocate a certain amount of capital for follow-on investments, but it will depend on our entry stage, how the company is performing and our maximum exposure."

The fund will hold around 30 investments. To date, the fund has backed Infarm, HealX, Spacemaker, Kheiron Medical, Peakon, Scoutbee, Koru Kids, Automation Hero and AccuRx. Richards said: "We have an active pipeline of opportunities."

People
Atomico – Niklas Zennström (CEO); Camilla Richards (partner).

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