Niklas Zennström and Janus Friis, the founders of Skype, have raised a new venture capital fund for investing in so-called “disruptive” early-stage European technology.
Atomico Ventures, the London-based group established by the pair in 2006, has raised $165m for its second fund, at a time when many venture capital groups are struggling to find investors.
The firm will focus on early-stage software and internet companies that have the potential to be “transformative”, said Mr Zennström. That model will be welcomed by British entrepreneurs, who have complained that in the downturn, investors have become more risk averse, making safer bets in later-stage companies.
“The type of companies we are looking at are consumer-facing and also small business … that do not need to build up sales forces around the world to scale and grow,” Mr Zennström told the Financial Times. “These are the kinds of companies like Skype, Google and Facebook who, if the business model is really working, they can get large revenues without having to go through too many financing rounds.”
Finding companies with strong management and great potential before other investors requires an “open-minded” but “surgical” approach, rather than chasing established themes such as iPhone applications or social networks, he said.
While Atomico will look for opportunities all over Europe, Mr Zennström said that London remained a hub for start-ups.
Atomico’s fundraising was not immune from the downturn. In a Securities and Exchange Commission filing last year, it said it originally hoped to raise $266m. “When we started we had a flexible number,” Mr Zennström said. “We think we have exactly the right amount of money.”
Atomico itself is the largest single investor in its new fund, although it is a minority stakeholder. A “relatively small number” of institutions supplied the rest of the financing.
Its existing portfolio companies include Viagogo, the ticket reselling site; Mydeco, Brent Hoberman’s home furnishings site; and Seesmic, a popular application for updating Twitter.
Atomico’s founders are known for establishing companies that disrupt existing industries. But Mr Zennström said that by adapting to Skype’s pressure on call prices, telecoms companies have discovered new businesses in areas such as broadband and consumers have benefited.