AI chip startup Graphcore closes $200M Series D, adds BMW and Microsoft as strategic investors

UK AI chip startup Graphcore has announced a $200 million Series D round today that’s jointly led by an existing investor, European VC Atomico, along with new investor Sofina, an investment holding firm. Graphcore says the Series D values the company at $1.7M. We’ve confirmed the valuation is $1.5M before including the new capital raised. We’re also […]

UK AI chip startup Graphcore has announced a $200 million Series D round today that’s jointly led by an existing investor, European VC Atomico, along with new investor Sofina, an investment holding firm.

Graphcore says the Series D values the company at $1.7M. We’ve confirmed the valuation is $1.5M before including the new capital raised. We’re also told that all the new money is inbound, with no cash-outs at this growth stage.

The 2016-founded, Bristol-based startup, which is building dedicated processing hardware for machine learning applications, bagged $50M in Series C financing a year ago, led by Sequoia Capital. That came hard on the heels of a $30M Series B led by Atomico, in July 2017.

It also raised a $32M Series A in October 2016. So Graphcore’s total funding raised to date is circa $312M.

In a blog post announcing the Series D, co-founder Nigel Toon says interest in the round was high but that meant there was a bit of a balancing act between existing and incoming investors.

“We have been receiving very strong interest from lots of large potential new investors, but our existing investors can see the strong growth path we are on, also wanted to invest much more and didn’t want to be diluted,” he writes. “We worked through the different offers and were able to reach a great outcome with new investors taking half the round and our existing investors matching this investment amount.”

One new investor in the Series D is London-based Merian Global Investors, via their Merian Chrysalis Fund along with other funds they manage.

Also joining are two new strategic investors BMW and Microsoft — clearing excited by the potential of Graphcore’s flagship Intelligence Processor Unit (IPU) PCIe processor cards to accelerate the deployment of a range of AI-based technologies that intersect with their own R&D labs.

Commenting in a statement, Tobias Jahn, principal at BMW i Ventures, said: “The versatility of Graphcore’s IPU – which supports multiple machine learning techniques with high efficiency – is well-suited for a wide variety of applications from intelligent voice assistants to self-driving vehicles. With the flexibility to use the same processor in both a data centre and a vehicle, Graphcore’s IPU also presents the possibility of reduction in development times and complexity.”

Existing investors also contributing to the Series D include Amadeus Capital Partners, Robert Bosch Venture Capital, C4 Ventures, Dell Technologies Capital, Draper Esprit, Foundation Capital, Pitango, Samsung and Sequoia Capital.

“We had to tell lots of potential investors that we didn’t have room for them,” Toon adds. 

Graphcore says the new funding will go towards scaling rapidly, with the company set to beef up its engineer teams at its Bristol HQ; its offices in London; Oslo in Norway; and Palo Alto in Silicon Valley.

It will also be opening new offices in Beijing, China and in Hsinchu, Taiwan.

Overall it says it intends to triple the size of its team.

“We will be ramping up our production and will be adding to our sales, marketing, finance, legal and people teams,” notes Toon. “Our goal is to build the global market leader in machine intelligence hardware and we are looking forward to an exciting new period of massive growth.”

Graphcore has been shipping its first products to early access customers this year — and generating its first revenues. And it says high volume production is now “ramping up” to meet demand for its IPU cards — which it bills as delivering an increase in speed of 10x to 100x vs current gen chipset hardware.

At the same time there’s growing competition in the dedicated AI chipset space — with what’s now an array of startups attracting an influx of VC dollars (SambaNova, Cerebras Systems, Cambricon Technology and Horizon Robotics, to name a few); alongside existing chip giants (like Intel and Nvidia) also now placing their own bets; and device makers like Apple getting deeper into designing their own silicon.

The race is certainly on to try out different ideas and architectures and see what meshes best with AI technologies and developers.

This report was updated with a correction that the Series D round is jointly led by one existing investor (Atomico) and one new investor (Sofina); rather than both being existing investors as we initially stated 

Q&A with Diversity VC’s Check Warner on newly launched Diversity & Inclusion guide for tech companies

If the last few years has seen a growing consensus that the tech industry has a diversity and inclusion problem, then what is clearly needed next are practical solutions. While most people agree that building a diverse and inclusive company culture is easier to achieve the earlier you set out to do so, for startups […]

If the last few years has seen a growing consensus that the tech industry has a diversity and inclusion problem, then what is clearly needed next are practical solutions. While most people agree that building a diverse and inclusive company culture is easier to achieve the earlier you set out to do so, for startups and even much larger companies it is often difficult to know where to start, let alone what your own eventual D&I strategy might look like.

Conversely, there’s a body of evidence that points to diverse teams creating more successful and longer-lasting companies. Besides, it’s never smart to leave talent on the table. Enter a new initiative from Diversity VC, a nonprofit partnership promoting diversity in Venture Capital, and London venture capital firm Atomico.

The pair have teamed up to launch what may well be an industry-first resource: a practical and hands-on guide for ambitious technology entrepreneurs to “help them build companies that have diversity and inclusion at their core.” The guide can be found online here, and is also in print. It was unveiled last week onstage at Slush 2018 by Diversity VC’s Check Warner and Atomico founder Niklas Zennström.

The objective of the “Founder Guide” is to be a central place for technology companies, large and small to “find pragmatic, actionable advice for planning, implementing and measuring their D&I strategy”. It’s also meant to be a work in progress, and with the help of feedback and suggestions, will evolve as the industry’s understanding of D&I develops.

More broadly, the guide focuses on diversity and inclusion in the workplace in its broadest sense, looking at ethnicity, socio-economic backgrounds, disability, gender, sexuality, religious faith, cognitive differences, dependants and caring responsibilities and how all those factors, and the “intersections of those factors,” can impact an individual’s success in tech companies, and therefore the success of companies overall.

In an email Q&A with Diversity VC co-founder and CEO Check Warner, we delved deeper into what the guide hopes to achieve, why D&I matters and what diversity and inclusion might look like as an end goal. I also argued that the way we think about D&I is currently too narrow and needs to put a greater emphasis on social mobility, which at times seems to be missing from the conversation entirely.

TC: Why did you decide to create a Diversity & Inclusion guide for tech companies? And why was it needed?

CW: The conversation on Diversity & Inclusion until now has focused on highlighting the challenges we face (which are significant), but there’s been very little actionable advice. The idea of the Diversity & Inclusion guide is to move the discussion forward. We want to start a positive conversation around what tech companies can do to promote diversity and inclusion, and we want entrepreneurs to start making simple, meaningful changes today. Sixty-five percent of founders surveyed in the Atomico State of European Tech Report said they didn’t have a Diversity & Inclusion policy for hiring, and 55 percent said there was no Diversity & Inclusion lead in their company (source — Atomico’s State of European Tech Report 2018).

The guide is intended to make it as simple and frictionless as possible to start that conversation and put in place a plan. At the same time, we know that this Guide is only the first step. It’s not a panacea for all ills. But we hope it helps move the conversation forward, and constitutes a step toward tackling the deep and nuanced challenge of creating an industry where everyone has a fair chance to succeed.

The organisation Diversity VC is a nonprofit dedicated to promoting diversity and inclusion in venture capital and tech. We focus on positive interventions and this guide is a high-impact, useful resource for VCs to give their portfolio companies, and for the industry as a whole. Atomico shares this mission and were being asked by their portfolio for help with Diversity and Inclusion, so we joined forces.

We hope that by publishing this guide now, and publishing it in a format which people can contribute and add to through our website www.inclusionintech.com, that we encourage input from companies who have had success in promoting Diversity and Inclusion. We’ve already started to see this happen, as we’ve had several notes from founders with suggestions of other interventions that can be made, even in the two days since the guide was released.

TC: Clearly diversity within the workforce is always going to be a “work in progress,” but in terms of an end goal, what does diversity actually look like?

CW: For us, success looks like a technology and venture capital industry where anyone, from any background, ability, religion, ethnicity, gender, sexuality and socio-economic background can succeed and thrive. We want there to be equity of opportunity between these groups and everyone else.

TC: What would you say to people who believe that although a diverse and inclusive workforce is a noble aim, early-stage companies and founders have much more immediate problems to solve, such as finding product-market fit, fundraising or making their first 10 hires. Therefore, a D&I strategy is nice to have but ultimately a distraction for a startup?

CW: Having a diversity and inclusion strategy is not “additional to” any of these things, but instead a key part of them, and an essential ingredient to success. When it comes to finding product-market fit, having a diverse team has been shown to increase creativity, and improve performance and profitability. A diverse team will also help the company connect to, and empathise with, a broader base of customers, which competitors who have homogenous teams will be in a much worse position to do. Having an inclusive company culture will ensure that a company can attract the broadest range of talent, and therefore pick and retain the very best people.

TC: The guide is pretty dense — yes, I’ve read it! — and packed with lots of actionable advice, but at times asks more questions of a company than it provides answers. Where should a founder or D&I champion within a company start if it all feels a bit overwhelming at first?

CW: Thank you for reading it! We’ve tried as much as possible to focus on practical advice and we have over 40 tech tools and resources included in the guide which can help with everything from hiring to culture to product design. There’s also a two-page summary of the key takeaways to make it as easy as possible for founders to digest. However — the structural inequalities that we’re talking about are multi-faceted and complex — so it’s unfortunately not something that can be simply “solved.” In our research we found the companies that were most successful in fostering a diverse and inclusive culture were the ones that included their employees, at all levels, in inputting and crafting solutions and answers, so we suggest that starting a conversation, asking questions and making sure that the whole company feels part of that conversation is a good beginning.

TC: The guide has a few passages on the role of PR as part of a D&I strategy. Shouldn’t this be one area where it explicitly isn’t about publicity as this leaves companies open to accusations — rightly or wrongly — of being superficial or so-called virtue signalling?

CW: The emphasis we have put on PR is about the need for leaders across the technology industry to show public commitment to promoting diversity and inclusion in their companies. For too long, this is a subject that people have been afraid of talking about for fear of “getting it wrong” or of revealing that they are not making progress fast enough. So long as the commitment to Diversity & Inclusion comes from a place of understanding and the actions being taken are genuine and actually helping, then companies should have nothing to fear in talking about their work in this area. In fact, I would like to see more leaders across the technology industry state, like Niklas Zennstrom has this week, where they are struggling and where they need to make more progress, as I think this will accelerate getting answers!

TC: The report provides some very good tips on how to get “buy in” for a D&I agenda across the whole company and from other stakeholders. Why is this important and what are the biggest mistakes a founder or other D&I champion can make in this regard along the way?

CW: Like any strategic project or undertaking, making sure that there’s a shared goal in terms of what the founder is trying to achieve is important, but it is particularly so when it comes to putting in place a D&I strategy because the impact of getting it wrong compounds as the company grows. One mistake I’ve seen is where well-meaning companies isolate a single group of people and focus their a D&I strategy on them, which may actually be to the detriment of other underrepresented groups, or to those at the intersection of multiple groups.

TC: It is very noticeable that in the “The current state of diversity and inclusion in tech” section of the guide the entire conversation is reduced to the underrepresentation of women in tech, leaving out other marginalised groups or other definitions of diversity. This seems to be quite common across the industry as a whole, where diversity at is times simply a byword for gender imbalances. Do you see this as a problem?

CW: I see this as a big problem. The whole guide is written to address the broad topic of diversity and we have deliberately chosen contributors to reflect these diverse perspectives, from LGBTQ founders, to people with cognitive and physical disabilities, to BAME founders and combinations of the above. Unfortunately the section on the “State of Diversity in Tech” is a reflection of the current frustrating lack of available data on any other aspect of diversity than gender diversity in the tech industry, which makes it very difficult to quantify the challenge.

This is something that Diversity VC and Atomico are working hard on. As an organization, Diversity VC is focused on Diversity & Inclusion in its broadest sense, and one of the big challenges that we set out to tackle was the lack of data on diversity in the VC industry. In 2019 we will be publishing the first-ever study on U.K. VCs that includes ethnicity data, educational backgrounds and career backgrounds, which will also help us understand the socio-economic backgrounds of the VC industry. Whilst this is not nearly enough, it goes some way to helping us understand diversity and inclusion beyond the narrow subject of gender imbalance.

TC: Related to this, socio-economic diversity, or the tech industry’s need to do a better job promoting social mobility as part of a D&I agenda, seems almost entirely lacking from the wider industry conversation and I’m not sure this guide does enough to change that. Isn’t this odd when it would seem evident to anyone who works in the tech industry that economic privilege and lack of social mobility is intrinsically linked to the marginalisation of many underrepresented groups?

CW: I agree that it’s hugely lacking in the conversation and that we need much more focus on this area. For me the biggest mindset shift required is to remove the rigid criteria of what hiring managers and recruiters are screening for when they are making hires. Our case study on Backstage Capital in section 3 is about recruiting through Twitter and Instagram, and having no set criteria for qualifications or subjects studied, and instead, hiring for aptitude and investing in training hires either on the job or through courses. Both apprenticeships and internships are an important part of this conversation and I’d like to see more done to promote these across the industry. At Diversity VC we are running an internship programme which aims to help people who don’t have qualifications (MBA or similar) which are sometimes sought by recruiters for venture capital. We’ve found this internship programme to be an effective way of getting young people into full-time jobs, despite the fact that a recruiter would probably have passed over their CV in a traditional recruitment process.

TC: I say this as a white male who comes from a middle class family (both my parents were teachers): You are a white woman who is private school and Oxbridge-educated and so some might say you are part of the problem as much as the solution. How do you square that circle in the important work you are doing at Diversity VC?

CW: Absolutely — this is something I’m very conscious of. I’ve been privileged in the opportunities I’ve had, which has given me an enormous leg up in getting into the industry. I find it completely unjust that others haven’t had the same chance which made me determined, almost as soon as I got into the industry, to get together with Travis, Lillian, Farooq and Anna, as well as our advisors, to do something about it. But, to echo a sentiment that I’m sure all of us share, the worst thing you can do in the face of something unjust is to stay silent.

The mission and the organization are also so much bigger than any individual. There are over 50 people across the industry that have volunteered on Diversity VC’s data projects, joined training programmes, mentored founders from diverse backgrounds, spoken at schools and universities, contributed to the Guide. In order for Diversity VC to be successful in its aims it is important that the leadership group is as diverse as possible, which is not the case today.

TC: Lastly, it is great to see a practical guide that has the potential to help produce some really tangible improvements in how tech companies approach D&I. If we look ahead, how different do you hope or expect the industry to be with regards to diversity and inclusion in one, five or 10 years?

CW: I hope that in one year’s time the industry is more comfortable and proactive in discussing the subject of diversity and inclusion, and that we have significantly more data than we do today to enable us to target solutions. In five and 10 years’ time I hope that the tech industry will have emerged as a leader in being inclusive and sets an example for other industries to follow. Since it is growing 5x faster than the economy, the impact that getting this right will make is hard to overstate.

Atomico’s fourth “State of the European Tech” report highlights lots of rosy numbers, but also a discrimination problem

For the fourth year in a year, the global venture firm Atomico has produced a “State of European Tech Report” and the again this year, there’s plenty for the firm — and Europe broadly — to crow about. According to the report, total investment in European startups reached $23 billion this year. That’s one-fourth the […]

For the fourth year in a year, the global venture firm Atomico has produced a “State of European Tech Report” and the again this year, there’s plenty for the firm — and Europe broadly — to crow about. According to the report, total investment in European startups reached $23 billion this year. That’s one-fourth the roughly $100 billion that’s expected to be plugged into U.S. startups by year end, but it’s a whole lot more than the $5 billion that was showered on European startups in 2013, just five short years ago.

That’s the good news — or some of it, anyway.

Working with data partners like Dealroom, Prequin, and about a dozen other companies, Atomico’s new report features a steady drumbeat of developments over which to cheer. Among them: in 2018, 17 more European companies became valued at a billion dollars or more by their investors. Three of the ten biggest venture-backed public listings came from Europe, including that of the streaming media company Spotify, whose shares began trading on the New York Stock Exchange in April. And startups across 10 European countries have raised more than a billion dollars since 2012, underscoring that while the U.K. remains the biggest tech hub on the continent, plenty of other countries are rising, including Germany, France, Sweden, and Spain.

As for Europe’s challenges, the uncertainty of Brexit is clearly at the top of mind for 5,000 founders, investors, and other professionals in the ecosystem who were surveyed for the report. Access to talent is overwhelmingly the top consideration when it comes to where to plant a company, and while Europe is home to some of the world’s best business and technical schools, it also relies heavily on friendly immigration policies. Meanwhile, Brexit threatens to end free movement from Europe. In fact, many respondents said that the ongoing uncertainty caused by the Brexit vote and exit process is impacting hiring, fundraising and office location decisions.

U.K.-based respondents said that already, they felt that it was harder to raise capital in 2018 compared with 12 months ago.

Another challenge for European companies to scale up are differing regulations in different countries around taxes and data privacy, among other things.

Yet an even bigger problem for Europe — as it here in the U.S. — is that the lip service being paid to diversity isn’t resulting in the numbers you might expect. Consider that in 2013, just 2 percent of female-founded tech companies in Europe closed funding rounds. In 2018, that percentage was . . . again just a measly 2 percent.

Other alarming numbers: Atomico found just one female CTO of the 175 venture-backed European tech companies that have raised a Series A or Series B in the past year. All-male founding teams received 93 percent of the capital invested, and all-male funding teams were responsible for funding the vast majority of deals.

Perhaps worst of all, fully 46 percent of women surveyed by Atomico said that they have experienced discrimination in the tech sector.

The research was released today at the Slush tech conference in Helsinki, Finland. It’s definitely worth poring over, too, though at 142 pages, you may want to grab some coffee first.

If you’re looking for more anecdotal information, you might also check out our sit-downs last week with investors Saul Klein of LocalGlobe, and four members of Accel’s London-based team, all of whom talked about the state of the European tech scene at our TechCrunch Berlin event.

Skype co-founder snags $105M for fintech lending venture in Southeast Asia

A fintech whale quietly going about its business in Southeast Asia has come out from under the radar after Oriente, a Hong Kong-based business headed by Skype’s first employee, announced that it has raised a whopping $105 million. It may not be well known at this point, but the company has some serious street cred. Oriente […]

A fintech whale quietly going about its business in Southeast Asia has come out from under the radar after Oriente, a Hong Kong-based business headed by Skype’s first employee, announced that it has raised a whopping $105 million.

It may not be well known at this point, but the company has some serious street cred.

Oriente was started in 2017 by Geoff Prentice, a Skype co-founder and ex-Chief Strategy Officer, Hubert Tai, a founder of Ping An’s Lufax and Chinese unicorn dangdang.com, and investor Lawrence Chu. The trio came together when Prentice moved on to Atomico — the VC firm started by Skype’s founders after they sold to eBay — and Chu, then with investment firm BlackPine, invited him to invest in Lufax where he bumped into Tai.

“I was going to start this fund with Lawrence to focus on old and new economy stuff together. We went to look at Southeast Asia financial services [businesses] and we were like ‘there’s nothing here.’ So I literally begged Hubert out of retirement and said ‘you’ve got to do this,'” Prentice, very much a straight shooter, told TechCrunch in an interview.

“Silicon Valley isn’t my cup of tea,” he added.

The project is definitely a far cry from the latest buzz in The Valley.

Oriente is aimed at providing digital credit and financial products in Southeast Asia, a region of 650 million people where the digital economy is predicted to triple over the next six years. Right now, it operates in the Philippines and Indonesia where its two services — Cashalo and Finmas, respectively — offer credit services for consumers using a mixture of online and offline. It is taking steps to launch in Vietnam but Prentice told TechCrunch that there is no other expansion plan at this point.

The goal is to digitizing financial services and help more people in Southeast Asia get access to banking services. While Southeast Asia is often reported to have a booming middle class, many are out of reach of that.

For example, in the Philippines — Oriente’s debut market — some 77 percent of the 105 million population is unbanked, according to a recent report. Of those unbanked, some 60 percent said that they do not operate an account due to a lack of money. The numbers are similar across other parts of Southeast Asia, yet mobile access is surging — Southeast Asia has more internet users than the entire U.S. population — offer a potential bridge to improve the situation.

Oriente’s first product was Cashalo which launched in the Philippines in June 2018

The services are digital but they use offline touch points to reach new customers. In the latter case, Oriente’s local businesses deploy salespeople in major malls and stores to help customers learn about the services themselves and the concept of payback schemes. Oriente takes a slight twist on the take. Instead of offering payback on single items, the services cover a basket of items to allow customers to pay a series of items on credit.

To help that offline push, Oriente has recruited top name investors that include a group of family offices that span members of the Berjaya Group, JG Summit Holdings and Sinar Mas. Though that is not the entities themselves, they have the potential to be highly strategic. Malaysia’s Berjaya is in property, consumer marketing and more; JG Summit operates retail, banking and even aviation in the Philippines; while Indonesia’s Sinar Mas covers financial services, telecom and more.

“If you want to build the financial services behemoth of Southeast Asia in the next 10 years how do you do that? Well, it’s going to be on a digital platform obviously but then, of course, we also have to have KYC people, you need your own collections people, you need offline sales… you need to take the best of the best technology part and then you merge it with the best of the other things,” Prentice said of the offline-online focus.

The business itself already has some 1,200 employees spread across seven offices in Asia — including a 200-person engineering team in Shanghai, composed of many former Lufax workers — with 60,000 borrowers in the Philippines alone. The Indonesian business is newer, having launched only in August and in beta, but the company expects to reach “millions” of lenders across its three markets next year.

One big challenge from an engineering perspective is constructing basic infrastructure, such as credit scoring, KYC and assessment. Existing credit bureau systems don’t cover many of the population, so Oriente is investing heavily in data-based systems to develop signals for credit assessment and, importantly, to combat fraud.

There are plenty of others battling the same fight in the region, with Ant Financial — Alibaba’s fintech affiliate — in particular setting up businesses across the region with a focus on payments and digital financial services. Grab, the ride-hailing firm that purchased Uber’s local business earlier this year, has also ventured into payments with plans for financial services as its nemesis Go-Jek has done already. That’s quite the backdrop for a battle with Oriente and its unique blend of experienced founders from the East and West and strategic corporate backers.

Update: The original version of this post has been updated to correct the investors.

Pitching a $99 tax advisory service for the masses, Visor has raised $9 million

The only sure things in this life, according to Ben Franklin, are death and taxes. And a new startup called Visor has just raised $9 million in financing to make one of them as painless as possible. Unlike Nectome, Visor won’t kill anyone, but it may ring the death knell for the high end tax advisors that most […]

The only sure things in this life, according to Ben Franklin, are death and taxes. And a new startup called Visor has just raised $9 million in financing to make one of them as painless as possible.

Unlike Nectome, Visor won’t kill anyone, but it may ring the death knell for the high end tax advisors that most Americans can’t even access to get help filing and paying their taxes.  It’s like having a personalized accountant for the cost of a high-end do-it-yourself tax-prep service.

The $9 million Visor raised came from the venture capital firm, Defy, with participation from Unusual Ventures, SVB Capital and existing investors like Obvious Ventures, Fika Ventures and Boxgroup, who had put a previous $6.5 million into the company. 

The idea for the company had been percolating for co-founder and chief executive Gernot Zacke since he settled in the U.S. 

Growing up in Sweden, Zacke was exposed to a much different process for paying taxes. “The experience of filing taxes in Sweden is that you receive a message from the government that stated how much you made and how much you were withholding. That’s it,” said Zacke. “Taxes should be as easy as ordering a cab.”

That’s the service that Visor aims to provide.

“If you think about the market there are two ways to get your taxes done. There’s the DIY space and then there are other online services but it requires the tax payer to fill out the forms and it leaves the tax payer with a little bit of anxiety,” said Zacke. “We’re delivering the CPA experience through the convenience of a web app and a mobile app.”

On average, Americans spend about 13 hours each year dealing with taxes, and the average American doesn’t have the benefits of a professional advisor who can help optimize the process. That’s what Visor wants to provide.

“You provide the same amount of information you provide to a CPA or TurboTax… we make sure that that information is filed securely on AWS and shared between the docs and the backend,” said Zacke. 

The target customers for Zacke’s services are folks who have had a change to their tax situation — whether moving, buying a home, or any other life event; or folks who have had a CPA and don’t want to pay the higher fees, he said.

Visor currently has an operations team of around 34 people split between San Francisco and Atlanta.

For Zacke, the painpoint he’s solving with the Visor service is very real. A former employee of the European investment firm Atomico, Zacke bounced between the U.S. and Europe — eventually running US investments for the firm before leaving to launch Visor.

Other co-founders and senior executives hail from the tax advisory world, and from employee benefits outsourcing services company, Zenefits, along with former Venmo and Square developers.

“Taxpayers spend $20 billion a year to get their taxes prepared and are stuck between spending hours filling out DIY tax software and hiring an expensive CPA,” said Zacke, in a statement. “

Electric flying taxi service Lilium poaches key hires from Audi, Airbus

Lilium, the developer of a new, electric, vertical take-off and landing vehicle for a novel flying taxi service, has poached some pretty big former executives from Airbus and Audi as it builds out its technology and gets ready to bring its service to market. Mirko Reuter, the former head of automated driving at Audi, has […]

Lilium, the developer of a new, electric, vertical take-off and landing vehicle for a novel flying taxi service, has poached some pretty big former executives from Airbus and Audi as it builds out its technology and gets ready to bring its service to market.

Mirko Reuter, the former head of automated driving at Audi, has come on board as the head of autonomous flight at Lilium. Jakob Waeschenbach, who worked as the head of equipment installation at Airbus, and Rochus Moenter, former vice president of Airbus’ finance and leasing group, have joined Lilium as head of aircraft assembly and general counsel and head of legal, respectively. 

Co-founded in 2015 by Daniel Wiegand, Sebastian Born, Patrick Nathen and Matthias Meiner, Lilium’s vision is to create a network for its proprietary vertical take off and landing vehicles that will slash the costs of air travel and can ostensibly take a passenger from Paris to London in about an hour.

Reuter, a longtime head of automated driving at Audi will be responsible for leading and developing the process and technologies necessary to bring autonomous aircraft systems to market, the company said in a statement.

I am deeply committed to our mission of creating a revolutionary service that enables effective and affordable transportation that is widely used among all sectors of society. At Lilium, we are building a new and revolutionary way of transport, and I am very excited to be a part of it,” said Reuter, in a statement. 

Lilium’s bulking up its executive team as it prepares for a rollout of its first vehicles in 2019, according to news reports. In 2017, the company raised $90 million in fresh funding from investors including TencentLGT, the international private banking and asset management group; AtomicoLilium’s Series A backer founded by Skype co-founder Niklas Zennström; and Obvious Ventures, the early-stage VC fund co-founded by Twitter’s Ev Williams.

The funding, and the executive hires, lend credence to Lilium’s business in an increasingly competitive industry (yes, the flying taxi industry is competitive).

German automaker Daimler joined a consortium of investors that backed Volocopter with roughly $28.5 million and the ride-hailing service Uber is working with Brazil’s Embraer and the Slovenian company, Pipistrel, to develop its own flying taxi. Indeed, the airplane manufacturer, Airbus, has its Vahana autonomous flying taxi, which it is hoping to bring to market in the coming years.

 

Atomico promotes Sophia Bendz to Partner where she’ll focus on Nordic investments

“I was hired when I was 8 months pregnant, so kudos to Niklas for betting on someone who was pregnant,” Sophia Bendz tells me. “That meant I was working a couple of hours per week in my first year and then I ramped up my engagement and now I’m at a point where I’m fully […]

“I was hired when I was 8 months pregnant, so kudos to Niklas for betting on someone who was pregnant,” Sophia Bendz tells me. “That meant I was working a couple of hours per week in my first year and then I ramped up my engagement and now I’m at a point where I’m fully committed. So it feels like it’s been a sort of organic journey that has happened”.

The former Spotify Global Director of Marketing (and Spotify employee no.9) is being unveiled as the newest Partner at venture capital firm Atomico . For the last two and a half years, she’s been Executive-in-Residence at the London-based venture capital firm co-founded by Skype founder Niklas Zennström, helping portfolio companies with marketing strategy and recruitment.

Since 2011, Bendz, who is Swedish, has also been an increasingly active angel investor in the Nordics region, where she’ll be tasked with sourcing deal-flow for Atomico. Companies that she has angel invested include Tictail, Joint Academy, Engaging Care, Bokio, Karma, Hedvig, Simple Feast, and Sana Labs, among others.

Bendz says that she was first introduced to Zennström through her work with GoEuro, one of Atomico’s portfolio companies. She was helping the mobility company distill its mission into a coherent marketing message that could be more easily articulated both internally and externally, the type of help that would have been of benefit in the early days of Spotify and that Zennström recognised could be of huge value to other startups in the Atomico portfolio.

“When I was at Spotify, I was fairly alone in my role and I didn’t have anyone to use as a sounding board or a mentor, if you will, so I needed to reinvent the wheel all over again… on my own. I would have benefited hugely from being able to talk to someone from time to time that have already been on a growth journey and built a company and built a consumer brand from scratch”.

During her eight years at Spotify, Bendz saw the music streaming service grow from 10 employees, in which she was the first marketing hire, to around 3,000. In her role at the company, she also spent five years in the U.S., where she was instrumental in launching Spotify across the pond.

“I think what I bring to the table [at Atomico] that we haven’t had already is obviously my operating experience,” says Bendz. “One of the things that I’m excited about doing is of course to leverage some of those learnings to the people that we work with in the portfolio companies, and that ranges from international expansion to how to maintain culture when growing really fast and marketing and communication and branding strategy”.

Atomico is also keen to tap Bendz’s personal network of early-stage founders and investors in the Nordics. She tells me that an important part of her pitch to Zennström was that the London VC firm should work closer with angel investors, as they know best what’s happening on the ground.

“I have been good at fostering a lot of relationships both with my former colleagues and many of them are now at interesting new companies, and then [there are] the founders of the companies I have invested in,” she says. “My network of talented entrepreneurs and founders will be a great benefit to Atomico because, you know, most of the time many of the good leads are coming from existing founders that are recommending other founders”.

Bendz’s angel investments lean towards consumer startups, unsurprising given her self-professed “love” for building consumer brands. Her personal investment interests include food tech and health tech, and she says she is particularly excited about companies that are solving a “real problem”. “I’m seriously worried about climate change, so I’m always looking for companies that are tackling that in some way,” she adds.

Meanwhile, it’s perhaps noteworthy that Bendz is Atomico’s fourth female partner, meaning that the VC firm is certainly walking the walk and not just talking. I ask Bendz if it is important to her that more women become investors and what role she sees herself playing in helping to improve the opportunities for women in the tech industry more generally.

“I’m a passionate about it and I do whatever I can to support female entrepreneurs and operators and investors; I myself have benefited hugely from having a huge support network of amazing women,” the Atomico partner replies. “And I’m not a big fan of just complaining about it, I rather want to do things about it. So, you know, looking into how we can scale it. That is something I’m passionate about and I definitely think it’s easier for a female entrepreneur to ping me and ask for, you know, 25 minutes of coffee and pitching her idea to me rather than someone who is an older man”.


Sophia Bendz will be on-stage at TechCrunch Disrupt Berlin later this month, more details to follow.

The Zennström manifesto

At almost 86 degrees Fahrenheit, London is enduring a mini heat wave by traditional British summer standards. News reports at the weekend had relayed findings from the Met Office’s latest “State of the U.K. Climate report” confirming that the country is officially warming. Perhaps the first two industrial revolutions have finally taken their toll on […]

At almost 86 degrees Fahrenheit, London is enduring a mini heat wave by traditional British summer standards. News reports at the weekend had relayed findings from the Met Office’s latest “State of the U.K. Climate report” confirming that the country is officially warming. Perhaps the first two industrial revolutions have finally taken their toll on the planet, just as the World Economic Forum argues that we are ushering in a fourth industrial revolution based on emerging technology such as artificial intelligence, robotics, the Internet of Things, biotechnology and quantum computing.

Knowing full well that the office building housing European venture capital firm Atomico happily pumps out air conditioning on a day like today, I’ve arrived 30 minutes early for an interview scheduled with founding partner Niklas Zennström. Prior to becoming a venture capitalist, Zennström co-founded Skype, the internet telephony company, which he famously managed to sell twice — first to eBay in 2005 for $2.6 billion, then to Microsoft in 2011 for $8.5 billion. A known environmentalist, with his wife Catherine, he is also the founder of Zennström Philanthropies, a nonprofit that supports organisations combatting climate change and promoting human rights and social entrepreneurship.

Located in Mayfair, one of London’s most expensive districts, Atomico sits within walking distance of the London offices of Accel Partners and Index Ventures. If Balderton Capital, the other of the “big four” early-stage VCs in the U.K., hadn’t moved to the trendier Kings Cross area in North London, Mayfair would be the closest thing the country has to Silicon Valley’s Sand Hill Road, renowned for its high concentration of venture capital.

I’m greeted by Atomico’s hard-working and always jovial head of communications, who seems slightly on edge, which I take as a compliment and has the converse effect of helping me relax. After taking the lift to the third floor, we find sanctuary in an empty and cool meeting room, and I remark that it feels like I’ve been reporting on Atomico for nearly as long as I’ve been a journalist. A quick count that morning revealed that I’ve covered just less than half of the companies in the current portfolio, as well as interviewed numerous members of the now 30-plus investment team. Yet I’d never met or spoken to Zennström.

The Atomico founder doesn’t give as many interviews as he used to, preferring to share media duties with the wider team, even though there remains a feeling within the organisation that the VC firm is sometimes misunderstood. Despite being in its 12th year and on fund four, Atomico is still considered to be the upstart compared to Accel, Index and Balderton, and amongst entrepreneurs and the press there are often a number of other misconceptions:

  • Atomico is a late-stage investor. Wrong. The majority of investments from fund four are at Series A, although the firm does invest at Series B, too, and typically follows on.
  • Atomico is mostly Zennström’s own money. Wrong. LPs in the fund do include Atomico partners, but mostly span the usual gamut of family offices and institutional investors such as pension funds, funds of funds and the EU taxpayer backed European Investment Fund.
  • Atomico only invests in consumer technology. Wrong. The firm is largely sector agnostic and places bets across B2C, B2B, software, hardware, deep tech and more.

What is perhaps better — and accurately — understood is that Atomico is one of the few European VCs to have developed a penchant for making “moonshot” investments: putting money into a number of genuinely groundbreaking companies and exploratory technology that isn’t expected to generate revenue for many years to come and will either change the world or fail spectacularly.

The best-known is probably Lilium, the Munich-based startup developing an all-electric vertical take-off and landing (VTOL) jet. It plans to use the aircraft to power a “flying taxi” service that wouldn’t be out-of-place in a Sci-Fi movie. Another is Memphis Meats, the San Francisco-based company growing meat in a lab by harvesting it from cells instead of animals. Then there is Graphcore, the Bristol, U.K.-based startup that is designing chips specifically for artificial intelligence, and which has its sights set on Nvidia. Lilium and Graphcore have raised more than $100 million each, while all three are yet to launch a product.

A few weeks prior to the interview I called various mutual contacts Zennström and I have to get a sense of what he is like as a person. Ambitious was a word that came back repeatedly. One entrepreneur who has taken investment from Zennström tried to convince me that there is no venture capitalist equal to him in Europe based on sheer ambition levels, which they said he always tries to instill in the startups he backs. I was also told that he is renowned for being an extremely tough negotiator (A partner at Atomico is rumoured to have asked one of the firm’s portfolio companies to have a pair of brass balls made as a present for Zennström in homage to a deal he recently got over the line.) Paradoxically, others said he can sometimes come across as shy or a little awkward, especially when talking publicly.

Atomico’s Niklas Zennström at TechCrunch Disrupt London 2016

I’m told Zennström isn’t short of entertaining stories, both from his time building Skype and before that through his association with the peer-to-peer file sharing application Kazaa, whose technology was licensed by Joltid, another company he co-founded. The success of Skype, which for millions of people made international calling effectively free, saw him become a major adversary to the incumbent telecommunications industry. In the early 2000s, following in the footsteps of Napster’s Shawn Fanning and Sean Parker, Zennström might well have been considered the entertainment industry’s enemy No. 1 due to the way Kazaa was used for music and film piracy, which led to multiple lawsuits.

As fun as I’m sure those anecdotes are, tales from a bygone era would have to wait for another day. With the interview restricted to just an hour and no red lines agreed upon, I had other things on my mind. Tech, it seems to anyone who tracks the industry for a vocation, is having a “moment,” and not always for the right reasons.

From the Facebook Cambridge Analytica scandal and social media’s reluctance to stem the flow of hate speech and misinformation, to bad behaviour, including sexual harassment and assault, bullying and racism, if ever the tech industry was in need of finding its moral compass, not only to remedy the problems of the past, but more so as we head into the future, it is now.

With $1.5 billion of capital under management, and its fourth fund totaling $765 million, perhaps more than most European VC firms, Atomico is well-positioned to help shape what that future looks like and play a significant role in determining how the technology industry evolves over the next 10 years and beyond.

 

Z

ennström enters the room in an upbeat and relaxed mood, and we exchange a few pleasantries — no social awkwardness detected. He thanks me for making the effort to visit Atomico (I have a reputation for conducting the majority of interviews remotely, partially because of the extra time and energy traveling consumes as a wheelchair user). Not wanting to waste any time, I switch on my iPhone’s recording app and fire my opening shot: “Why did Atomico need to exist when you first founded this VC firm, and probably more to the point, why does it still need to exist today?”

People told me there is no ambition level in Europe. Niklas Zennström
Zennström laughs, having seen the second half of the question coming a mile off, and then launches into a precursor to the Atomico pitch. He says that when he was building Skype (and before that Kazaa and Joltid), he always had people tell him that you can’t build tech companies in Europe, and that if you want to build a tech company, you need to be in Silicon Valley.

“People told me there is no ambition level in Europe, there’s no development, no talent, nothing,” says Zennström. “Certainly what was true, what I learned firsthand, [was that out of] the VC firms back then in Europe, most of them were very risk-averse. They’d rather bet on a copy of something they’d seen in the U.S., deployed in a small market. And there was also much more of a mentality back then about making a quick buck and exiting early instead of building companies for the long-term.”

He says that when he pitched Skype to European VCs many said they didn’t dare invest as they hadn’t seen anything like it before and they didn’t understand why he and co-founder Janus Friis would want to take on the whole telecoms industry. Instead they asked if he could create telecoms enterprise software, which, the VCs argued, would feel a lot safer. In contrast, many VCs in Silicon Valley thought Skype was amazing and liked the sheer level of ambition, leading them to ask when the London, U.K. and Tallinn, Estonia-based company was planning to relocate. Zennström’s reply: “Well, actually, we’re not moving here.”

“The Skype exit, I think, was a big milestone for Europe. We showed and proved you could build a [European] company that had a big value,” he says. “The thesis that we developed was that if we could do it then a lot of others can do it because we’re not that special; there’s a lot of people who are a lot smarter than we are. So we had the thesis that Europe will produce a lot of great companies in the future and that the existing VCs were risk averse.

“As an entrepreneur — and of course being rejected so many times — it was clear to me [that] my next industry to disrupt needs to be European venture capital.”

This led to the realisation that the reason why many European VCs were so risk-averse and “asked weird questions” was because they had never run companies.

“You need to build a VC firm with people who have also built businesses, because you can build a better rapport with founders if you have done it yourself,” says Zennström. “And of course if you’ve been a successful founder, you probably have a competitive advantage to get access to founders because they’d rather take money and advice from someone who has done it themselves.”

Even at larger venture capital funds, he says that founders tended to only deal with one partner and perhaps one associate, who may or may not be that great. To mitigate this risk, he decided he needed to build a team at Atomico that could help with core aspects of scaling, such as entering new markets, recruitment, marketing and strategy, long before it was fashionable to do so in Europe. The result is Atomico’s “Growth Acceleration Team,” staffed by former operators at major tech companies, from Skype and Google to Uber, Spotify and Facebook.

Adds Zennström: “The mission was to prove and to help to build the tech ecosystem in Europe. And that was important because, at the end of the day, this is innovation, and if you don’t have innovation in the future technologies, you’re gonna be a stagnant region. As a European citizen and someone who wants to live in Europe, I thought it was important.”

The Atomico team

To part two of my question — why Atomico needs to exist today — Zennström says that although we are seeing an inflection point of accelerated growth in Europe, as evidenced by Spotify and Adyen going public, we are still behind the U.S., and it isn’t mission accomplished just yet. More profoundly, he says there is now a second aspect to Atomico’s mission: backing founders who are building technology “that can actually have a positive impact on society.”

“What we’ve seen over the last few years is more and more founders who are building companies to address world problems, whether that is sustainability problems, trying to fix education, trying to fix healthcare, using AI to massively improve the detection of diseases, or treating mental illness, fixing transportation, fixing the food chain that is broken. If we can support those entrepreneurs who are going after these big opportunities, bigger problems, and if some of those companies can be successful, that can be a positive impact on some pretty urgent challenges we have in this world.”

We might be destroying our planet because of tech. Niklas Zennström
Zennström says that some of those urgent problems have their genesis in our parents’ generation, who didn’t understand that certain things would become a problem because it was assumed that the world had infinite resources. “But we know very well now that was not the case,” he says.

It’s a theme that the Atomico founder returns to throughout the interview: the idea that the non-digital technology of the last century has had a lot of positive benefits, such as cars, airplanes and combustion engines, which have been instrumental in driving economic growth and productivity, “but has had a tremendous impact on our society in terms of the environment.”

“We might be destroying our planet because of tech,” he says, before reiterating his belief that digital technology and innovation can fix some of these problems. The examples he cites are electric transportation and technology that can help us become less reliant on animal farming — an indirect reference to two of the VC firm’s moonshots.

“If we are leaders and we are people with the ability to have an impact, then it’s not only an obligation, it’s obviously the right thing to do… But we also think that those companies are also the ones that can become some of the biggest companies in the next 10, 15, 20 years, because these problems are really, really big.”

At this point I’m reminded of something Zennström said onstage at TechCrunch Disrupt London in 2016: that politicians are no longer the changemakers. But what exactly did he mean?

“Well..,” he says, breaking out in laughter and rowing back temporarily in reference to Brexit. “Some politicians made change in this country, unfortunately, although it was a referendum and ultimately it was the people who voted, but I think some politicians mainly messed up.

“But what I’m saying with this is, as we’re living in a world which is very dynamic, and whether we have a better world or a worse world than before can be debated, there’s a big paradigm shift that is happening in many ways…

“Not all of them but most politicians are tactical and they seem to be more focused on optimising for the sake of winning the election rather than doing the right long-term thing for the constituency, that’s why they’re not really leaders. A real leader is also someone who goes out and says, ‘these are things we need to do, because we need to pave the way to a better future.’

“In that way, they’re not as great leaders as some of the politicians we had from time to time in history.”

Zennström believes that this is where entrepreneurs can and are taking up some of the slack through tech’s ability to drive change, coupled with a millennial mindset that is seeing consumers “actually thinking about purpose and mission and trying to do the right things.”

I push back a little and suggest there is also a climate where too many startups overstate their missions when at the end of the day they’re building for-profit businesses that will eventually come under pressure to prioritise returning value to shareholders. Recent history is full of examples of tech companies that have seemingly lost their way in pursuit of growth and I wonder if this is something the Atomico founder spends much time thinking about.

“Yeah, big time… We think about this a lot,” he says, and then goes on to offer what can only be interpreted as a diagnosis of Facebook’s recent woes, even though neither of us has mentioned the social network by name.

Compared to when Zennström was building Skype — a time when there weren’t as many feedback loops available — online companies are now incredibly data-driven, he says. And although this “has been amazing,” there are also downsides.

“If you’re a company based on advertisements, all your engineers, your rank engineers who are working on the ranking and how content should be displayed, they are trying to optimise for engagement, right? It’s like, what is our North Star, we try to get people to engage, to click more and come back more. Then they have basically black box algorithms, lots of data points, and out of that comes the content and advertising that is displayed so that people come back. And that becomes the model.

“And then it’s like, ‘well, we are just trying to optimise our business, we’re not doing anything wrong.’ That’s kind of how most engineers in some of these bigger companies are thinking. They may not necessarily think at all that they’re losing their way: ‘We’re doing really well because our algorithms are awesome.’ But then when they take a step back and look at the consequences, it’s like, ‘wow, that didn’t go so well, did it?’ ”

As companies become big, they also become “big machines,” especially if they’ve gone public and where the expectation from the stock market is to continually drive growth. “If you don’t drive growth, guess what, your share price is plummeting and people lose money relative to what they had the day before. So they all want to fuel that growth, without having really thought about some of these consequences.”

Zennström on stage with former U.S president Barack Obama at Nordic Business Forum

This is where Zennström, aged 52, sees a role for industry veterans like himself, and Atomico more broadly. He says the VC firm encourages young founders to grapple with these kinds of issues early, as well as helping them build in company mechanisms “to make sure we have the right backbone so we don’t lose our way.”

“Those are conversations we are having with founders,” he says. “What is the culture you are building, how do you think about the ethics of your business, so that when you become successful, you’re gonna be a company you can be proud of.”

When entrepreneurs and VCs in Silicon Valley talk about “changing the world” through technology, there is always implicit assumption that it is for the better. Does the Atomico founder view tech as agnostic or is tech inherently good?

“I think most people who are in tech believe that ultimately tech is positive,” replies Zennström, although he says that it is not a new debate.

“Let’s take tech from the beginning, the industrial revolution and the first pieces of technology. It’s a philosophical question: before we had the plough, the hammer, were we happier? If you read Socrates, maybe we were happier when we were hunter-gatherers, I dunno,” he says, laughing. “Now we live in a society because of technology.”

Zennström recalls how users of Kazaa sometimes shared “really bad content,” which he says was horrible to see but that tech and the internet is simply a reflection of humanity and turbocharges connections.

“Of course it’s a positive thing that people can connect with each other. Connectivity is better than isolation, I think, as a starting point. But when people connect, it can also be misused.

“We cannot just say, ‘it’s not our responsibility’ and everyone else who is involved in tech. We need to have conversations about this and say, ‘what is acceptable and what is unacceptable.’ And those conversations did not happen…”

But are they happening enough now?

“Not enough, but they’re happening… We certainly have a lot of those discussions, both internally but also with other people we know in the tech industry. I’m sure also within the big tech companies they’re happening but it’s harder for them to move because they’re so big. But I think they’re not happening enough, we need to have more of those conversations.”

A diverse decision group makes better decisions. Niklas Zennström
Zennström says that the challenge for anyone running a large tech company is that lawyers will often dictate what can and cannot be said, which stifles debate and prevents an open discussion. CEOs are advised to toe the party line “and then that party line becomes truth.”

“It’s easier if you’re not running a big tech company to have discussions about what is right or wrong,” he says.

If big tech is prone to adopting a PR “line” as internal truth, I wonder what role Zennström sees the tech press having in reinstating much-needed checks and balances, and if he were to score the press, how good or bad are we doing?

Careful not to take the bait, he says the press has a “very important” role to play in highlighting issues facing the technology industry and tech’s broader impact on society, even if he believes the discourse could benefit from going deeper.

At the same time, we both agree that in some sections of the press, the discussion has gone from an overly simple narrative of “technology is amazing” to “technology is awful,” and Zennström says in some ways we are already in the midst of a public “techlash” that is only going to get more intense.

“I think there is risk for that to become much bigger, because of the strong impact and growth of tech and the development of algorithms and AI and [the] adaptation of that,” he says.

“In many cases when you’re applying AI and machine learning to something, you have biases and then you get a biased outcome. And of course it’s a very interesting thing for the press to write about… so I’m sure you’ll have more and more of these stories. Then you add the risk of more people losing jobs because of tech. Of course there will be a bigger backlash. That’s why it’s so important to have even more discussions.”

Asked what stage AI is in its overall development — since a lot of the technology is overhyped and under-delivers — Zennström says we are still at the beginning, but that AI/machine learning is being used every day to influence what news and what content we are exposed to. “It’s deployed at a massive scale already. And it has impact. It’s not in the future, it’s here,” he says.

“The amount of engineers, computer scientists, mathematicians spending time on machine learning and AI today is just massive compared to about five years ago. There’s so much focus on innovation in AI… it’s probably going faster than many people expected.”

As a journalist who has steadfastly stuck to covering European tech (even when it was detrimental to my career), when I look at AI companies in the U.K. and the number that have already exited, I can’t help feel like they are selling out incredibly early. Zennström doesn’t entirely disagree.

“I think that maybe some have,” he says, although there are several other AI companies in the U.K. and Europe that are looking promising and that have certainly not sold out. “Just like when people told me [that] maybe we sold Skype too early… you also have to think a little bit in the context of the times. If you are early in the cycle and you don’t really see a future in how you can get funding, then maybe it is okay to sell.”

At the same time, he thinks that with more and more funding coming into AI companies, investors in the U.K. are realising that the country is building “really good AI companies” and are encouraging startups to stay independent for longer.

With our allotted time together coming to an end, I hastily turn the topic to diversity, one of tech’s liveliest and at times divisive topics. I wanted to know what diversity actually means to Zennström, and — playing a little devil’s advocate — if it is something early-stage startups should even care about.

He says the way Atomico thinks about diversity — and something that is actually stated in the VC firm’s internal principles of how the organisation should operate — is that “a diverse decision group makes better decisions,” which he says is also borne out by the available research.

“If there’s a bunch of people who are coming from an exactly identical background then each person is not going to add as much,” he says. “For us, because that’s the core thing we do, we make investment decisions, we think it’s important for us as investors. So diversity in that broader sense is people with different backgrounds.

“And of course everyone talks about gender diversity, that’s one dimension. There’s so many other diversities, there’s faith, there’s cultures, there’s age, there’s disabilities, there’s sexual orientation, there’s if you’re introvert, extrovert, if you’re a business person, if you’re an engineer, if you’re someone coming from an unprivileged geography. It’s like, there’s so many different dimensions on this.

“So we think it’s important… we think that we as an investment firm need to be much better, to be diverse, but we need to think about it in the broadest context and we’re striving to do that.”

Atomico almost certainly does better than most VC firms in Europe or elsewhere in terms of gender diversity: Counting the entire 51-person team, 53 percent are male and 47 percent are female — although it is less clear how well it does by other measures.

For startups, especially consumer companies, Zennström argues that they also should have a diverse team because that will likely better reflect their consumer base. “That’s just being a better business,” he says.

“When we are investing in a company, we are talking to them about this. These are conversations we are having, it’s like, ‘how do you think about diversity?’ If they say ‘I couldn’t care less, I just want to build a good business,’ we say ‘if you want to build a great business, you probably want to think about diversity and be active about it.’”

I think that when you have an issue, you first need insight that you have a problem. Niklas Zennström
It is noticeable that the case Zennström makes for a more diverse workforce, either in venture capital or at technology companies in general, is largely a business one, which prompts me to air a view I’ve held for a while as I’ve watched diversity move further up the tech industry agenda: In Europe we have blindly imported Silicon Valley’s version of diversity and as a result there doesn’t seems to be nearly enough emphasis on how diversity relates to European and British progressive notions of social mobility and building a more equal society.

“I feel like if tech treats diversity as the way you described it, it misses a trick,” I tell Zennström. Tech is a great enabler and therefore should also be a vehicle for social mobility. If we are creating this brave new world, with lots of money being generated or value being captured based on new technologies, and not employing a workforce of all the talents, by which I really mean class as much as gender or ethnicity, then something is going badly wrong.

Zennström says that of course tech has a role to play in promoting social mobility, although at first I’m not sure he entirely gets it, even if he undoubtedly thinks about these kinds of issues more than most VCs.

He says there are already initiatives trying to tackle this problem, such as Zinc.vc, the London-based company builder that wants to solve “huge societal issues,” and which counts Atomico as a backer. Zinc’s latest cohort is being asked to focus on people living in places that have been hit hardest by automation and globalisation over the last 20 or 30 years as traditional industries have declined.

“What’s interesting about these things is that what drives an entrepreneur is some kind of hunger: if you’re very privileged you might not be that hungry,” says Zennström. “But if you’re underprivileged you’re probably going to be hungrier to create change. So I think there’s also an opportunity to find entrepreneurs among groups of people who might be less privileged in society.”

“And in a word, so far,” I ask, “the U.K., Europe, Silicon Valley, are terrible at doing that, aren’t they?”

“Yeah,” he replies. “I think that when you have an issue, you first need insight that you have a problem… It’s very early but I think what is good is that there’s an awareness and there’s a lot of initiatives and discussions about these things, which did not happen 18 months ago.”

Atomico’s Yann de Vries joins flying taxi company Lilium as VP Corporate Development

Perhaps the one downside to building a venture capital firm filled with operational experience is that you can’t always keep an operator out of the action for too long. Or so it seems, if the latest VC move at London-based Atomico is anything to go by. Atomico Partner Yann de Vries — who led investments […]

Perhaps the one downside to building a venture capital firm filled with operational experience is that you can’t always keep an operator out of the action for too long. Or so it seems, if the latest VC move at London-based Atomico is anything to go by.

Atomico Partner Yann de Vries — who led investments in Teralytics (Switzerland), GoEuro (Berlin) and Jobandtalent (Madrid) — is joining Lilium, the super ambitious Munich-based startup developing an electric vertical take-off and landing (VTOL) jet and accompanying “air taxi” service.

Specifically, he takes up the position of VP Corporate Development at Lilium, tasked with helping the company with long-term partnership development and investor relations.

De Vries joined Atomico four years ago from Redpoint e.ventures, a leading VC fund in Brazil, where he was a Managing Director and co-founder and led investments in Farfetch and Gympass. Prior to starting RPeV, he was the head of Corporate Development for Cisco in EMEA and Latin America, and spent five years in Silicon Valley working for a startup and in venture capital.

I’m told de Vries — who speaks four languages and holds an MSEE from the Swiss Federal Institute of Technology in Zurich (ETH) and an MBA from Harvard Business School — was already involved with Lilium as part of Atomico having led the company’s Series A round back in 2016.

The VC firm followed on as part of Lilium’s $90 million Series B late last year, and although Atomico (and Skype) co-founder Niklas Zennström led on Atomico’s behalf, he worked closely with de Vries on the investment and is fully supportive of the former Atomico Partner’s latest move.

“Lilium is on a very exciting trajectory, and Yann’s experience makes him a perfect fit to lead their corporate development strategy,” says Zennström in a statement. “As an investor we are very supportive of the transition and have confidence in the impact Yann will have at Lilium. As a board member I look forward to continuing to work with Yann in the next phase of his career”.

Meanwhile, the hiring of de Vries as Lilium’s VP Corporate Development follows a number of other prominent roles being filled in the last 18 months.

They include Dr. Remo Gerber, former MD for Western Europe at Gett, who joined Lilium as chief commercial officer; Dirk Gebser, VP of Production and previously holding manufacturing executive roles at Airbus and Rolls Royce; and Meggy Sailer, Head of Recruitment, who was formerly Tesla’s Head of Talent EMEA.

Most recently, the German flying taxi company recruited car design veteran Frank Stephenson, who has previously worked for Ferrari, Maserati and Mini, to name but a few. I caught up with Stephenson for an extensive Q&A in April where he described joining Lilium as a “match made in heaven”.