Our commitment to building a more diverse and inclusive European technology ecosystem
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 our 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:
- Atomico is a diverse, equal-opportunity firm with diversity hiring targets, retention plan, inclusive culture, open sharing of information, transparent decision making and an accessible environment for all.
- Atomico finds and invests in the best and most ambitious founders from a diverse set of demographics, backgrounds, and experiences in order to maximise fund performance.
- Atomico actively supports portfolio companies to be leaders in building diverse teams and inclusive cultures.
- Atomico engages and supports underrepresented individuals, organisations and relevant investors in the European technology community, focused particularly on discovering the best underrepresented founder talent and supporting them to reach Series A stage, where Atomico can invest directly.
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. We are running a survey again this year covering diversity and inclusion in the ecosystem: please participate.
We were one of the first funds to participate and become certified in The Standard — a Diversity VC and Diversio initiative to promote best practice D&I initiatives in the VC sector both for hiring and investment.
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:
- Our Diversity & Inclusion Taskforce, with representation from across the firm including Partner and Investment Committee level, will continue to drive and track our progress internally and hold the team accountable.
- Concrete internal goals (OKRs) relating to diversity are in our internal hiring. We require at least 50% of underrepresented candidates in the shortlist for all roles. We aim to hire at least 50% underrepresented candidates.
- We are partnering with organisations including SEO London, Diversity VC and Future VC to source diverse candidates for our internship programmes. We also intend to broaden our sourcing methods beyond the more traditional agency route, in an effort to generate a more diverse pipeline of candidates.
- Concrete internal goals (OKRs) relating to diversity and inclusion are in our onboarding and training processes. All new joiners participate in a diversity and inclusion onboarding session. All our Investment and Growth Acceleration Teams undergo specific diversity and inclusion training.
- We are making our culture more open and inclusive. We run monthly engagement surveys using Peakon to help us identify areas for improvement — and act on change. We have instituted a set of best-in-class benefits to support new parents on our team, including equal maternity, paternity and adoption leave, flexible working policies and emergency childcare.
- We are partnering with community organisations supporting diversity and inclusion among the investment community, including Out Investors, a global network for LGBT+ investment professionals and Level 20, a not for profit organisation dedicated to improving gender diversity in the European finance industry. We welcome hearing from other such organisations on the contact details below.
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 support organisations that work with underrepresented founders at the earliest stages. We’ve hosted workshops, breakfasts, panel discussions, and networking sessions with groups like Diversity VC, SEO London Entrepreneur First, and Female Founders. Who we invest in is a reflection of who we spend time with — so we want to continually increase the diversity of our network. That is why we’re also partnering with best-in-class organisations, YSYS and Colorintech, who support underrepresented founders at the earliest stages of company formation and acceleration. This is only the start — we want to connect with more organisations across Europe, working to support underrepresented founders. You can find our contact details at the bottom of this post.
- We have made a number of LP commitments into funds at the seed and pre-seed ‘first money in’ stage targeting underrepresented founders including Ada Ventures, Backstage Capital, January Ventures, and Zinc; and will continue to make more investments of this kind as more of these funds emerge.
- We have set out goals to increase diversity within our sourcing funnel and overall investments. Our aspiration is to have 40% of all companies coming into our pipeline to have a founder from an underrepresented background. As a result, our aim is to reach 40% of our overall investments having a founder from an underrepresented background. 25% of our active portfolio companies currently have a founder from an underrepresented background. We need to be intentional in our actions to hit and exceed our ambition, and by being transparent with our aims we hope to be a part of the continual progress that needs to be made. We will keep reviewing these targets to see if, and how, they should be adjusted.
- We are introducing the Access Atomico office hours programme to give actionable advice to underrepresented founders. We’ve set this up to be a scalable and recurring programme that will run every week and is supported by every member of our Investment Team, Growth Acceleration Team and other specialist functions, such as Legal, Insights and Investor Relations.
- We will continue to develop our Angel Programme, which supports a new, diverse generation of European founders, operators, community builders and sector experts by giving them the capital and mentorship to enable their first experience investing as angels. We’ve been deliberate about having equal gender representation, and choosing participants from a variety of backgrounds. Many of our angel programme participants are active proponents of diversity in the ecosystem as well, such as Katja Toropainen in Finland, Andy Davis in the UK, and Roxanne Varza in her work in France with Station F. As a result, across the 70+ companies that our angels have invested in to date:
- 57% of founding teams have at least one founder from an underrepresented background
- 49% have at least one female founder
- 18% have a non-white founder
- 8% of teams have a least one black founder
- Comparative industry data shows only 0.5% of self-identifying Black/African/Caribbean founders have raised external capital in Europe versus 84% of White/Caucasian founders, and $92 of every $100 went to all male teams in 2019.
Post-Investment: Scaling impact
- As a VC firm, beyond backing a more diverse set of founders we can also make a difference by making diversity and inclusion a priority for every company we invest in. This is how we can magnify the scale of our impact by ensuring our portfolio companies build diverse teams themselves and that they build products that have all of society in mind.
- Our term sheets require that portfolio companies have a Diversity & ESG Policy within three months of closing and a Diversity Strategy within six months of closing. A Talent Partner helps companies get this in place, and it is monitored by the investment lead and checked quarterly. Our Talent Partners also help our founders build more diverse leadership teams, company culture and hiring processes.
- We will engage deeper on topics related to diversity, equality and inclusion with our conscious scaling workshop, which we use to help founding teams envision their business model or technology’s impact on a variety of stakeholders.
- We published a free Diversity and Inclusion Guidebook for founders, in collaboration with Diversity VC, which offers case studies, resources and other materials.
- We track and report diversity statistics internally and to our LPs.
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:
- If you want to work with us please send your CV to [email protected]
- If you’re an underrepresented founder in Europe thinking about raising your Series A in the next 12 months please reach out to us on [email protected]
- If you are an organisation or individual focused on improving representation in technology please reach out to our Head of Community Arabella Reeves on [email protected]
- If you’d like to be considered as an angel for our next Angel Programme cohort please contact us on [email protected]
- If you want to participate in our Access Atomico office hours please reach out to our Head of Community Arabella Reeves on [email protected]
- If you want to hear more about the State of European Tech report, suggest a dataset or get involved please contact Sarah Guemouri on our Insights team on [email protected]
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.