20 VC 067 Scaling Startups Into Unicorns with Atomico's Mattias Ljungman and Carolina Brochado



In a dynamic episode of the 20 minutes VC, host Harry Stebbings presents the show's first dual interview featuring Atomico's Mattias Ljungman and Carolina Brochado. Ljungman, a co-founder of Atomico, discusses his journey in venture capital, emphasizing the importance of entrepreneurs investing in entrepreneurs and the global expansion of portfolio companies. Brochado, Vice President at Atomico, shares insights on her transition from investment banking and private equity to VC, underscoring the value of operational experience and the necessity for VCs to remain open-minded in the rapidly evolving tech landscape. They delve into Atomico's mission to empower entrepreneurs globally, the firm's focus on later-stage investments, and the unique challenges of Series B and C funding in Europe. The conversation also explores the rise of tech ecosystems across Europe, the significance of success stories in fostering entrepreneurial growth, and the strategic considerations for startups looking to scale. Both guests advocate for curiosity, relentless pursuit, and a global perspective as key elements for those aspiring to enter the VC industry.

Summary Notes

Introduction to the 20 Minute VC Dual Interview

  • Harry Stebings introduces the first dual interview on the 20 Minute VC podcast.
  • Guests are Matthias Ljungman and Carolina Brochado from Atomico, a leading venture fund in London.
  • Matthias Ljungman co-founded Atomico in 2006 and has been involved in significant exits.
  • Carolina Brochado is the Vice President at Atomico, focusing on sourcing, evaluation, and due diligence of investments.
  • Prior to Atomico, Carolina worked at Merrill Lynch and Madison Dearborn Partners.
  • Harry Stebings endorses Hiring Screen as a quick and easy recruitment tool.

"Now, you may have heard me say before that today we have a special show for you, but today we really do have an incredibly special show as we welcome our first dual interview." Harry Stebings highlights the uniqueness of the episode featuring two venture capitalists from Atomico.

The quote establishes the significance of the episode as the first dual interview on the podcast, setting the stage for a unique discussion with two prominent figures in the venture capital industry.

Carolina Brochado's Career Path to VC

  • Carolina interned at Atomico during her MBA in the U.S., transitioning from PE to VC.
  • She values the growth aspect of VC over the financial engineering of PE.
  • Carolina became COO at a startup, gaining operational experience across various roles.
  • She believes operational experience is helpful for VCs but having a broader perspective is also beneficial.

"Sure. So I actually interned at Atomico in 2012. At the time, I was getting my MBA in the US and I had come from being an investor in a role in PE and I was really looking forward to moving into VC, where you're actually helping businesses grow as opposed to the more financial engineering of private equity." Carolina Brochado explains her transition from PE to VC and her motivation behind it.

The quote provides insight into Carolina's career trajectory and her preference for the hands-on, growth-oriented approach of venture capital compared to private equity's financial focus.

Matthias Ljungman's Entry into VC and Atomico's Founding

  • Matthias has a passion for the impact of technology on society and the economy.
  • He pitched the concept of Atomico to Nicholas Zennström, focusing on entrepreneurs investing in entrepreneurs.
  • Atomico was founded to make an impact on the venture industry and help companies go global.

"Well, I was always super interested in the impact of technology, both on the products sectors, the economy, and then generally society at large. So it was something that I had a huge passion for." Matthias Ljungman shares his interest in technology's broad impact, which led him to venture capital.

The quote reveals Matthias's motivation for entering the VC industry and highlights his passion for the transformative power of technology in various sectors.

Advice for Aspiring Venture Capitalists

  • Matthias advises having a passion for the VC industry and being relentless in pursuing entry.
  • Carolina emphasizes the importance of curiosity, open-mindedness, and the ability to listen and reflect.

"Well, I guess you get to have that sort of innate passion for it and be willing to be actively sort of want to challenge and change this space." Matthias Ljungman offers advice to those interested in entering the venture capital industry.

The quote suggests that a strong passion and a desire to make a difference are crucial for success in the venture capital field.

Atomico's Mission and Investment Strategy

  • Atomico's mission is centered around entrepreneurs investing in entrepreneurs.
  • The firm helps companies expand globally, with team members in Japan, China, and Brazil.
  • Atomico believes that great companies can emerge from anywhere and can access global markets.

"I think like I indicated earlier, Tomico is all about entrepreneurs, investing entrepreneurs. That's how we got off the ground, and it's still very much the passion and the sort of beating heart of what we stand for." Matthias Ljungman describes Atomico's core mission and approach to investing.

The quote outlines Atomico's foundational principle of supporting entrepreneurs and its commitment to assisting companies in achieving international growth.

Global Market Opportunities for Entrepreneurs

  • The conversation begins with a recognition of the excitement surrounding global market opportunities for entrepreneurs.

"That makes it so exciting for the entrepreneurs."

This quote highlights the enthusiasm for the potential that global markets present to entrepreneurs.

Investment Focus and Average Check Size

  • The discussion moves to investment preferences, with a focus on later stages, specifically Series B and beyond, despite acknowledging the abundance of capital in seed and Series A stages in Europe.

"And I think for us, again, it's about how we can continue to be a good partner in this industry, where we're able to bring together entrepreneurs and capital."

Carolina Brochado explains the importance of being a supportive partner in the industry by aligning entrepreneurs with capital.

"So it's more the sort of series B and beyond, but just because we see that that's a big opportunity."

The focus on Series B and later stages is due to the perceived opportunity in these rounds.

The Barbell Effect in VC Ecosystem

  • An observed barbell effect in the venture capital ecosystem is discussed, with a lot of money at the seed and Series A stages and pre-IPO, but a weakening at Series B and Series C.

"I think it's an interesting time for Europe."

Carolina Brochado notes the unique period for European venture capital, with more funds being created than ever before.

"There's not as many funds focused on the sort of b. And beyond that are very much local european funds."

Carolina Brochado points out the scarcity of European funds that focus on Series B and later stages.

"The later stages actually are becoming funded by international players."

Carolina Brochado observes that as companies grow and gain global presence, international investors tend to fund the later stages.

The State of Series C Funding

  • Matthias Ljungman and Carolina Brochado agree on the weakening of Series C funding rounds and attribute it to the distribution of capital and the natural evolution of venture capital.

"Yeah, I agree with that."

Matthias Ljungman concurs with the observation of fewer Series C fundings and suggests reasons for this trend.

Growth and Success in European Entrepreneurship

  • The conversation highlights the growth of entrepreneurship in Europe, with increasing success stories contributing to more individuals entering technology sectors.

"There's increasing success stories right in Europe as well, about companies having big exits, and you have people who have had a big exit feeding back into the ecosystem."

Carolina Brochado emphasizes the positive feedback loop created by successful European companies and entrepreneurs.

The Best Time for European Entrepreneurs

  • The panel discusses why it is considered the best time in history to be a European entrepreneur, citing technological advancements and the breakdown of barriers.

"I think really the dawn of the iPhone was pretty amazing."

Carolina Brochado cites the launch of the iPhone as a pivotal point in technology history, correlating with the creation of billion-dollar companies.

"You can be anywhere and launch an app and you can distribute that everywhere."

Carolina Brochado highlights the global reach and accessibility that modern technology provides to entrepreneurs.

Furthering the Entrepreneurship Movement

  • The discussion touches on the role of government and regulation in furthering the entrepreneurship movement, with some sectors being slower to adapt due to the importance and sensitivity of the areas they cover.

"Yes, of course. And I think this happens more quickly in certain sectors than in others."

Carolina Brochado acknowledges that progress can be made in supporting the entrepreneurship movement, with varying speeds across different sectors.

Sector-Specific Pace of Change

  • The conversation identifies healthcare and financial services as slow-moving sectors due to their critical nature, while other industries have been rapidly transformed by consumer technology.

"Healthcare and probably financial services particular in certain sectors can be slow moving."

Carolina Brochado points out that healthcare and financial services are cautious due to the significant impact they have on people's health and finances.

"The mobile phones have made certain industries so viral that it goes beyond sort of what anyone could control."

Matthias Ljungman suggests that mobile technology has accelerated the growth of certain industries to an uncontrollable extent.

Rising Tech Ecosystems in Europe

  • London, Helsinki, Berlin, and Stockholm are recognized as emerging hubs for technology and innovation.
  • London's fintech community is particularly notable due to the city's historical financial expertise and capital availability.
  • The UK government and regulatory bodies have fostered a supportive ecosystem for fintech.
  • Entrepreneurs are relocating to London from the US and other parts of Europe to establish fintech companies.

"I mean London's a very exciting place to be for fintech. You know, historically I think from a financial services point of view, a lot of very big players had been here and a lot of capital has always been here."

The quote emphasizes London's historical significance in financial services and the existing capital that makes it an attractive location for fintech companies.

Key Factors for Hub Success

  • Hubs thrive on competitive advantages unique to their location.
  • For Helsinki, it's the talent pool in gaming originating from Nokia.
  • London offers financial services expertise, a supportive regulatory system, and capital.
  • Factors like affordable rent or a skilled workforce can also contribute to a hub's success.

"I think it really depends, but I think it goes back to those competitive advantages that make businesses thrive."

This quote highlights that the success of business hubs is tied to their unique competitive advantages, which vary from one location to another.

European Tech Ecosystem's Strength

  • Europe is currently seen as an excellent place for entrepreneurs due to the ecosystem's strength.
  • Successful entrepreneurs become mentors and investors, fostering the next generation.
  • The presence of management teams from successful companies starting their ventures enhances the ecosystem.
  • Stockholm is noted for its high number of billion-dollar companies per capita, rivaling San Francisco.
  • Berlin is recognized as a unique tech hub with a global outlook.

"We've never seen this kind of strength before across Europe."

The quote underscores the unprecedented robustness of the European tech ecosystem and its positive impact on entrepreneurship.

Importance of Location for Startups

  • The significance of a startup's location is diminishing in today's global market.
  • Entrepreneurs need to stay globally competitive and aware of international trends.
  • The traditional concept of a company's origin being tied to national boundaries is becoming outdated.

"It's so hard to know, where does a company come from?"

This quote reflects on the changing nature of business in a globalized world where the location of a company's origin is less relevant than its global reach and impact.

Atomico's Role in Scaling Startups

  • Atomico leverages the experience of technology veterans to assist startups in scaling.
  • Key areas of support include talent acquisition, HR capabilities, and company culture.
  • Atomico helps startups navigate the transition to larger teams and diverse skill sets.

"I think talent is an obvious thing that comes to mind, and that's both sort of setting up a sustainable hr capability where you can keep up with the hiring that is necessary for your business with all the top people in what is an increasingly competitive workforce situation."

The quote indicates that one of the main areas Atomico focuses on is helping startups build a strong talent and HR foundation to support growth in a competitive job market.

Atomico's Value Addition Beyond Talent

  • Atomico provides guidance on crafting effective pitches and defining company identity.
  • They emphasize the importance of clear communication for recruitment, customer acquisition, and partnership building.
  • Atomico assists with market entry strategies for large economies like Japan, which remains a significant global market.

"It's really important that, again, you get your pitch right and explain what you stand for and how clearly define yourself against your competitors."

This quote stresses the importance of clear and effective communication in differentiating a startup from its competitors, which is crucial for various aspects of business growth.

Global Expansion Strategy

  • The importance of entering new markets like Japan, China, Brazil, and others.
  • Assistance provided to entrepreneurs for rapid market entry.
  • Emphasizes the value proposition of certain markets, such as Japan's willingness to pay more for products.

And Japanese are great at paying for their products. They pay more than many other people in the world. And so this is something, again, that we try to work with entrepreneurs like, okay, look, this is a good opportunity for you.

The quote highlights the attractiveness of the Japanese market for entrepreneurs due to the higher payment propensity for products, underscoring the strategic advice given to entrepreneurs for global expansion.

Favorite Books and Their Impact

  • Matthias Ljungman's favorite book is "Midnight in the Garden of Good and Evil" for its complex characters and reflection of life's nuances.
  • Carolina Brochado's favorite book is "The Girl Who Saved the King of Sweden" for its humor and commentary on global issues like apartheid and politics.

It's a book about set in a town in the south, in the US, and the characters are just super complex and there's so many layers.

The quote explains why "Midnight in the Garden of Good and Evil" is Matthias's favorite book, emphasizing the depth and complexity of its characters.

It's a real page turner you're going to read in a few days. It just makes fun of people. And you have a wonderful heroine who comes from South Africa, who lives in the, I think it's, you know, it deals with apartheid, it deals with the king of Sweden and the sort of old fashioned nature of that bit.

Carolina Brochado describes her favorite book, "The Girl Who Saved the King of Sweden," highlighting its engaging narrative and satirical take on various societal and political issues.

Productivity Tools

  • Matthias Ljungman and Carolina Brochado discuss their must-have productivity tools.
  • Wunderlist and Evernote are highlighted for task management and note-taking.
  • Carolina also uses Pocket for saving articles to read later and Smart News for daily news aggregation.

Of course wonderlist is obviously yours. As know, I love wonderless. I cannot live without it. I do use it daily and I think Evernote is fantastic.

Carolina Brochado expresses her reliance on Wunderlist for daily tasks and praises Evernote for its functionality.

I love pocket for sort of saving my reading for later. And then sort of another shameless plug is smart news, which is a news aggregator and I actually am a very diligent user every day for my news.

Carolina Brochado shares additional productivity tools she uses, including Pocket for managing reading material and Smart News for staying updated with daily news.

Preferred Blogs and Newsletters

  • Benedict Evans and Dan Primack's Term Sheet are mentioned as valuable resources for insights and industry news.
  • The Skim is noted for its humorous take on must-know news.

Well, for me it's Benedict Evans. I think he's great. I just think the insights, the thoughts, the angles that he comes at and the data that he takes out I think is wonderful.

Matthias Ljungman expresses his admiration for Benedict Evans' blog for its insights and data-driven approach to technology and market analysis.

I have two that I read every day. One is the skim, which has sort of been around for three years. And they're very, in a very funny way, they sort of highlight in the morning, all the must know news and the other one is Dan Primax, term sheet and sort know for the trade is excellent.

Carolina Brochado shares her daily reading habits, highlighting The Skim for its engaging presentation of news and Dan Primack's Term Sheet for industry-specific information.

Successful Venture Capitalists

  • David Sze of Greylock Partners is recognized for his transformative investment in Facebook.
  • Fred and Joanne Wilson are admired for their big thinking and support of their local ecosystem.

David sees Greylock and I think it was a seminal moment when he invested in Facebook. I think that changed the rules of the game.

Matthias Ljungman acknowledges David Sze's impact on the venture capital industry through his investment in Facebook, noting its game-changing nature.

I'm going to go for a couple here if I can, and I'll go with Fred and Joanne Wilson. And I think they think big. They really support their local ecosystem in many ways and I think they're building something really impressive, both of them.

Carolina Brochado praises Fred and Joanne Wilson for their visionary approach and contributions to their local business environment.

Recent Investments and Rationale

  • Matthias Ljungman's investment in Truecaller was driven by the team's excellence and their solution to a significant global issue, particularly in emerging smartphone markets.
  • Carolina Brochado chose Gympass for its strong team, execution, and mission to improve health and fitness, as well as personal pride in a Brazilian company's potential to scale.

So my most recent investment was in Truecaller. The team was awesome. Love the team. And obviously they're taking on a big hairy problem, global in nature, growing quickly in the emerging markets where actually we're seeing this change of the smartphone world is really taking over markets like India.

Matthias Ljungman shares his latest investment in Truecaller, emphasizing the team's capabilities and the significance of their market, particularly in the context of smartphone adoption in emerging markets.

I'm going to go with gympass. It's a company out of Brazil that's doing something very interesting in terms of fitness and benefits, and they're expanding. I'm brazilian myself, so the pride in me, it's a company that may come out of Brazil and get really big.

Carolina Brochado explains her investment in Gympass, highlighting her personal connection and belief in the company's growth potential and mission.

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