Brian Nichols is the co-founder of Angel Squad, a community where you’ll learn how to angel invest and get a chance to invest as little as $1k into Hustle Fund's top performing early-stage startups

Niklas Zennstrom grew up in Sweden, studied business and engineering physics at Uppsala University, and spent his final year at the University of Michigan. He worked in product and strategy roles at European telecom companies in the 1990s. In 2000 he co-founded Kazaa, a peer-to-peer file sharing network that became one of the most downloaded applications in internet history. The entertainment industry sued. Zennstrom and his co-founders sold Kazaa to pay off the litigation.

Then came Skype.

Skype and the European Proof Point

Zennstrom co-founded Skype in 2003 with Janus Friis. The company was incorporated in Luxembourg, with engineering in Tallinn, Estonia. The product used peer-to-peer technology to route voice calls over the internet, allowing free voice calls between computers anywhere in the world. It solved a real, expensive problem: long-distance telephone calls.

Skype's growth was explosive. By 2005, 54 million users had registered. eBay acquired it that year for $2.6 billion, one of the largest internet acquisitions of its time. Microsoft later acquired Skype from eBay for $8.5 billion in 2011.

The significance of Skype for the European tech ecosystem was not just the returns. It was the proof. A technology company built in Europe, with a distributed team across multiple small markets, could achieve global scale. Zennstrom has said that Skype's success became the foundational permission structure for a generation of European founders, including Sebastian Siemiatkowski, who co-founded Klarna in Stockholm and has cited Zennstrom as the inspiration.

Atomico and the European VC Mission

Niklas Zennstrom investments through Atomico began in 2006, the year before Skype was sold to eBay. He founded the London-based venture firm with the explicit mission of proving that European tech companies did not need to move to Silicon Valley to succeed.

Atomico has backed Klarna, the Swedish buy-now-pay-later company that was briefly the most valuable private fintech in Europe; Supercell, the Finnish mobile games studio behind Clash of Clans, which SoftBank acquired at a $3 billion valuation in 2013; Stripe, the payments infrastructure company, which is Irish-founded and now valued at $107 billion; DeepL, the German AI translation company; and more than 200 companies across four continents.

Fund VI, raised in September 2024, totaled $1.24 billion, split between a $754 million growth-stage fund and a $485 million early-stage fund. That represented a 50% increase over the $820 million Fund V raised in 2020.

Eric Bahn of Hustle Fund has made the point that the most important thing any regional investor can do is build a portfolio that proves the region can produce world-class outcomes. Zennstrom built Skype as that proof, then built Atomico to institutionalize it. Angel Squad's community of 2,500-plus investors across 50-plus countries includes many members building similar proof points in their home markets. The community is at hustlefund.vc/squad.

The Skype Deal Structure

The Skype acquisition has two chapters that are worth separating. eBay bought the company in 2005 for $2.6 billion. The strategic rationale, that Skype communication would encourage more e-commerce activity on eBay, never materialized. eBay sold 65% of Skype to a private equity consortium led by Silver Lake in 2009 for $1.9 billion, valuing the whole company at $2.75 billion. Zennstrom and his co-founders retained their equity.

Microsoft then paid $8.5 billion for Skype in 2011. The founders' retained stake, combined with the private equity consortium returns, generated a total outcome substantially larger than the initial 2005 valuation suggested. Staying in through a complicated ownership restructuring, and having the exit come four years later at three times the 2009 valuation, is a lesson in patient secondary-market positioning that applies broadly to any investor thinking about private company liquidity.

The Climate and Philanthropy Layer

Zennstrom co-founded Zennstrom Philanthropies with his wife Catherine in 2007. The foundation focuses on climate change and human rights initiatives. He also founded Race for the Baltic, a nonprofit targeting the restoration of the Baltic Sea, one of the most ecologically stressed major bodies of water in the world.

He has funded a visiting professorship in climate change leadership at Uppsala University and served on the advisory board of the Stockholm Resilience Centre. These philanthropic commitments reflect the same "world-positive" investment instinct that runs through Atomico's portfolio.

He is also an elite racing yachtsman. His yacht Rán has won four world championships, including multiple international offshore racing titles. Sailing is not a metaphor he relies on. He just wins at it, repeatedly and at the highest levels.

The Geopolitical Context

Atomico's 2024 fund launch came as European tech VC was navigating a significant funding contraction. European startup funding fell from €82 billion in 2022 to €45 billion in 2023. Atomico's own annual State of European Tech report has documented that trajectory and has been consistently candid about where the ecosystem is behind the US and where it is ahead.

Shiyan Koh of Hustle Fund has noted that the best regional investors publish their research publicly rather than treating it as proprietary. Atomico's State of European Tech is the best annual report on the European ecosystem, and it serves as both deal flow infrastructure and brand building for the firm.