https://www.wired.co.uk/article/wired-work-smarter
In 2002, Niklas Zennström needed money for his software application, Skype. He believed it had the potential to upend telecommunications, but investors were nervous. Read more: 'Now is the best time in history to be an entrepreneur in Europe': State of European Tech report
"Most European VCs wanted to back copycat businesses, but we wanted to define a new category worldwide," Zennström says. In 2003, he raised money from Bessemer Venture Partners. Skype, which he founded with entrepreneur Janus Friis, became one of the world's biggest tech firms, with 74 million users in 2016.
Zennström soon realised the only people who would bet on game-changing ideas would be founders themselves. After selling Skype to eBay for $2.6 billion (£1.6bn) in 2005, he founded Atomico with Swedish investor Mattias Ljungman. "We had a competitive advantage to do something no one else could, because [in Europe] no one else had been in my shoes," Zennström says. "Few people believed there would be multi-billion-dollar companies emerging from Europe."
In February this year, Atomico announced a £627 million fund, evidence that Europe is bucking a global trend. Whereas Silicon Valley funding in 2016 fell 28 per cent year-on-year, European investment in the fourth quarter rose 22 per cent. "We have the ingredients for a successful ecosystem. Forty-four per cent of successful founders in Europe are angel investors. That's critical," Zennström adds.
Read more: Atomico's huge $765 million fund will help European startups go global
Atomico has been involved in some of Europe's biggest exits and investments, including the sale of Berlin-based organiser app Wunderlist to Microsoft. It also played a role in Japanese telecommunications giant SoftBank's partial purchase of Finnish game developers Supercell in 2013. Now it's betting on startups founded on deep tech. Zennström says Europe has an advantage, with research institutions producing strong founders; Lilium Aviation, for example, which makes vertical-takeoff aircraft, was founded by engineers from the Technical University of Munich. Atomico invested £8.6 million.
Other investments include Zurich-based Scandit, which turns smartphone cameras into industrial-level barcode scanners, and Mapillary, which stitches together photos to create a visual map of streets. "We are looking quite broadly at companies," Zennström explains. "The common theme is great founders who have what it takes to win in their category in the long term."
Partner- "Given the geopolitical headwinds, we're going to start seeing US founders ask themselves: 'Is the US really enough?' They will be looking for international partners who can help them shift toward global expansion much faster. We're uniquely positioned in Europe between the US and Asia to help accelerate that process, which will only serve to bring more talent and opportunity into Europe."
Partner- "One sector I would draw attention to is the field of deep tech - AI, hardware, robotics, augmented reality, VR and the internet of things - where Europe has been punching above its weight. It's already producing leading companies such as DeepMind. Atomico has a strong team with ex-CTOs and computer scientists. This helps us invest in and support companies robustly."
CEO and co-founder- "There are two observations about the ecosystem that we are excited about. The first is the number of technical founders who are creating deep-tech companies and helping Europe become a leader in AI, VR and augmented reality. Secondly, we're seeing more companies created outside the traditional tech hubs of London, Berlin and Stockholm. The entrepreneurship bug has spread across Europe."
Partner- "In the fintech sector, I expect to see increasing collaboration between incumbents (banks, insurance companies, etc) and startups. This will disrupt the consumer and SME experience in even more significant ways. I'm also watching out for a transformation in food sustainability and the way that we deal with waste management, as well as the production and distribution of food."
Co-founder and partner- "The past decade has seen profound changes in how we communicate, keep in touch with friends and start businesses. All of this is driven by technological innovation. The next decade will see change at a far more ambitious and meaningful scale, [affecting] how we learn, keep healthy and use natural resources. We believe that, in our lifetime, entrepreneurs will solve some of humanity's greatest challenges."
Executive-in-residence- "In Scandinavia, we'll see lifestyle and healthcare businesses gaining momentum and changing consumer behaviour, as well as further penetrating healthcare systems. I'm also excited to see strong female founders leading deep-tech businesses such as Greta.io and Iris.ai. Nordic companies will continue to work on water and energy systems, and financial and employment access for refugees."
This article was originally published by WIRED UK
