When Niklas founded Atomico in 2006, the guiding principle of the firm was the conviction that great companies can come from anywhere. The motivation was not merely altruistic. As no single geographical region had the monopoly on transformative ideas or great talent; it simply made sense to seek out great companies in more places, and specifically in Europe which had long been overlooked.
What was once a radical concept is now an accepted truth – transformational technology companies which tackle meaningful challenges, enhancing our lives and creating substantial value in the process actually do now come from anywhere and everywhere.
Is it enough? No.
The democratisation of opportunity should not be limited to geography. Technology now affects pretty much all aspects of our lives. Every industry across every sector is being reimagined with new processes, and that always starts with people willing to build companies and those willing to back them. Too often, these people are from a select and homogeneous pool of people who look (and often think) the same. The ecosystem needs more diversity of race, gender and perspective. This way the companies that are built here, and the products and services they create, will better reflect the communities they serve. Not addressing this means the world is missing out on someone who might develop the next ground breaking technology that vastly improves our collective future.
It is our strong conviction that this is not only the right thing to do, it’s ultimately the smart thing to do.
At Atomico, we are committed to building the world’s most prosperous, sustainable, diverse, inclusive and mission-driven technology ecosystem in Europe. We believe a more diverse and inclusive technology industry will increase the overall opportunity set for everyone.
Change of this scale doesn’t happen overnight. It doesn’t happen without collective and concerted action. The European technology community cannot shy away from how difficult it will be to turn the tide. But in sharing our objectives and approach publicly here, we at Atomico hope to help others in developing their own approaches – and improve ours. We want to build new partnerships, broaden our networks and hold ourselves accountable too.
VCs, including Atomico, have a vital role to play in building a more diverse and inclusive technology ecosystem. We all invest in companies whose products will potentially be used by millions of people, employ hundreds of thousands and generate huge economic value. With that in mind, there are two parallel areas that Atomico can directly influence to improve diversity and inclusion in the European VC and technology ecosystem:
A note on how Atomico currently defines underrepresentation and measures progress:
Atomico’s definition of underrepresentation includes perceived gender, ethnicity, sexual orientation (LGBTQ+), disability and socioeconomic background (including education). We have been measuring on the basis of perceived gender and non-white ethnicity since 2017, and we plan to instigate self-reporting tools both internally, and externally, to enable more granular measurement that is compliant with data privacy considerations. We’re aware the industry needs better measurement, but that many companies consider data privacy considerations related to GDPR to be a constraint. We are looking at ways to capture more granular data, while staying compliant. We think this likely requires an industry-wide initiative.
It shouldn’t take a public movement or a tragedy to really address an important issue like equality. Sometimes, however, it takes something shocking and extreme to shake you out of complacency and act as a catalyst to accelerate change.
The Me Too movement did that for us with gender diversity in 2017. We held a mirror up to ourselves and realised we had not come far enough with our team. We set ourselves Objectives and Key Results (OKRs), changed how we found and interviewed candidates, and how we mentor our people once they join. Three years on, our investment team is 45% women, up from 20% in 2017. Across our entire team we are now 55% women, including five partners.
We then started to look at our investments. One of the first steps we took during Fund IV (2017), was to institute in our term sheets a requirement for companies to have a diversity and inclusion policy in place within six months of investment. This put the topic of diversity and inclusion at the founder level right from the outset of our relationship. It’s an important element when we’re evaluating companies and creates a formal commitment and shared set of values from day one. We also began to formally engage and support existing portfolio companies on diversity and inclusion, so it is engrained in the business approach and culture early on as those companies begin to scale.
In our most recent fund, Fund V (closed earlier this year), our increased focus on diversifying our team and sourcing companies with underrepresented founders, has resulted in 29% of companies we’ve backed to date having at least one founder from an underrepresented background. This is up from 22% in Fund IV. We are making progress, but we’re aiming to move further.
We began monitoring diversity and inclusion data from across the whole European technology ecosystem in 2018 and publishing it in our annual State of European Tech report. Since we made this a focus, our data has been used globally in more than 400 media articles from more than 20 countries and helped to accelerate a conversation about diversity and inclusion in European technology.
And now in 2020, in the wake of the tragic killings of George Floyd, Breonna Taylor and Ahmaud Arbery among others in the United States, and the reality of the European and UK context for the global Black Lives Matter movement, we are awakened by the urgency of the change required. In this light, we at Atomico are looking again at our approach to diversity and inclusion. We recognise that we need to be more open, more intentional and redouble our efforts and actions.
Our Atomico team has always had a diversity of background, ethnicity, age, nationality and thinking, rooted in our origins of scaling a global technology business. We have not focused enough on continuing to build on these origins, to keep broadening out the diversity of our team. Currently, for example, we have no black investment team members – we need to change this.
Whilst there is more to do, we made progress on gender by coming together as a firm, making it a priority and holding ourselves accountable. We will now bring this same concerted effort to improve the diversity of our team on other dimensions and hopefully at the same time encourage diversity across the ecosystem.
This means we need to be nurturing, recruiting and developing the best talent, who are representative of society and ensuring that our culture is inclusive. This is true from the earliest stages of the pipeline, including providing detailed feedback to all candidates when they don’t get the roles so that they know exactly why and how to improve going forward, through to thinking about training and culture for established professionals.
Our firm, from top to bottom, is fully aligned behind the following measures:
The biggest impact a VC can make is where to invest its money and how to support those investments. We at Atomico know we will only deliver sustainable, systemic change for our business and the ecosystem by focusing on how we source our investments, what we invest in and the support we offer to those in our portfolio and beyond.
We also need to support our ecosystem earlier in the process to build the right conditions for more underrepresented founders to get to Series A where Atomico can invest. That means helping to break down some of the barriers which exist and creating new networks.
Our firm, from top to bottom, is fully aligned behind the following measures:
We want to hear from others in the ecosystem – particularly from underrepresented founders, from organisations and individuals focused on improving representation in European VC and technology and from anyone who shares our mission. Please contact us using the below information:
We can’t do things the way we did them before – and neither can European technology as a whole. That means not relying on our existing team, our existing network, and our existing processes. We all need to keep challenging ourselves to be intentional about everything we do, to help create a fairer and even more successful startup ecosystem here in Europe.