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How top VCs raise more capital than needed
The increase in unallocated capital among European VCs, Atomico’s $1.24 billion startup fund, and more...
SearchVentures
March 19, 2025
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European VC raised more funds than needed
The top VC funds in Europe raised 36% more capital than their initial targets in 2024, but still allocated less funding to startups overall.
What is causing this discrepancy?
This Week’s Trends
European VC raised more funds than needed
The $1.24 Billion raised by Atomico
The €165 million biotech fund and more
Read Time 3 minutes
The Startup Trend
Europe Matches the US in Unicorn Efficiency
Despite the overall funding decline, Europe’s top VC funds beat expectations in 2024 (€15.1B → €20.5B) after nearly meeting targets in 2023 (€21.4B → €20.8B).
> European VC deals were down by nearly 10% in 2024 which indicates a notable increase in unallocated capital (dry powder) within the top VC firms.
> This aligns with the data from Invest Europe, which shows that there has been a 3x increase in dry powder between 2015 and 2023, from $34 billion to $104 billion.
💡 The discrepancy indicates that Limited Partners have retained confidence in VCs, while VCs have become more selective with their investments in startups.
Startup Feature
Atomico’s $1.24 Billion Startup Fund
The Atomico leadership team
Atomico, the London-based venture capital firm founded by Skype co-creator Niklas Zennström, has raised $1.24 billion in fresh funding for European startups, marking one of the largest VC raises in Europe last year.
This is more than a 50% increase from its previous $820 million fund, raised in 2022, signaling significant investor confidence for large European VC firms.
Betting on European Tech Startups
The firm has allocated the capital across two funds. Atomico Growth VI will invest $754 million in late-stage startups from Series B to pre-IPO, while Atomico Venture VI has set aside $485 million for early-stage startups, focusing primarily on Series A and Seed rounds.
This strategic division allows Atomico to support founders throughout their entire growth journey and to reduce risk by progressively increasing investment capital in their portfolio startups as they raise consecutive funding rounds.
“European founders are building global businesses and they deserve the capital to scale them at home.”
With deep-pocketed investors traditionally favoring the U.S. and China, Atomico is doubling down on European founders, providing capital at crucial stages of growth.
The Return of Late-Stage Capital
While early-stage funding in Europe has remained relatively stable, late-stage rounds have been harder to secure. Atomico’s new fund is one of the few in Europe prioritizing these later rounds, providing founders with much-needed capital to scale.
The fresh capital injection for the firm follows on the back of a strong track record with investments in startups such as Klarna, Stripe, and MessageBird.
“We see a long-term shift where European capital is staying within Europe, rather than flowing to Silicon Valley.”
Investor appetite for European VC also remains strong, with sovereign wealth funds, pension funds, and institutional investors driving much of the new capital.
However, following a more uncertain macro environment many European VCs are adopting a wait-and-see strategy, ensuring they deploy funds at the right valuations amid shifting market conditions.
For Atomico that means that there is now added pressure to start turning the new capital into several startup investments this year.
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Headline News
This Week In Startups ✍️
Founders
> Jutro Medical, which provides a platform integrating online and offline care, has raised €12 million in Series A led by KAYA VC and RIO ASI.
> Kaiko Systems, a provider of AI-driven frontline intelligence for the maritime industry, has raised a €6 million Series A funding round.
> PULSETRAIN, a battertech startup, secures €6.1 million seed investment to extend EV battery lifespan by 80 per cent and boost efficiency.
Investors & VCs
> Sofinnova, a European VC firm, closes €165 million biotech acceleration fund, Biovelocita II, with support from Amgen, BMS and Pfizer Ventures.
> Wind, a Paris based VC firm, has secured a €30 million commitment from the European Investment Fund (EIF) for Wind II, its new early-stage Article 9 fund.
> Fund F, an Austrian VC firm closes €28 million fund to back gender-diverse fouding teams, surpassing its initial target of €20 million.
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Cheers,
Odin Lund & Hari Mohandas
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