Atomic isn’t a household brand, but Peter Thiel and Marc Andreessen know it fairly intimately. The two billionaire investors, along with the venture firm Felicis Ventures, were among the earliest investors in the four-year-old, San Francisco-based startup studio, which closed its debut fund with $20 million.
Now Atomic is looking to raise five times that much capital for its follow-on effort, shows an SEC filing.
The company declined our request for an interview earlier today, but given its traction so far, don’t be surprised if it lands there quickly.
First, what it does: Atomic, which has 15 employees, judging by LinkedIn, essentially comes up with its own ideas for companies, then seeks out individuals who it thinks could steer these companies. After that, it seeks out larger investments from conventional venture capital firms to build them into sustainable businesses.
So far, Atomic — which is headquartered a stone’s throw from Thiel’s firm Founder Fund, in San Francisco’s verdant Presidio national park, and has a sales office in Phoenix and a small engineering campus in Waterloo — has come up with 10 companies, six of which are listed at its website, and at least four of which have raised significant funding, shows Crunchbase.
Among them are the Wi-Fi marketing startup Zenreach, which has now raised $80 million altogether, including from Founders Fund, Formation 8 and others; a consumer photo service called Ever that last month raised $16 million in Series B funding led by Icon Ventures, with participation from Felicis Ventures and Khosla Ventures (it has raised $29 million altogether); and the voice-powered sales startup TalkIQ, which closed on $14 million in Series A funding last month, led by Scale Venture Partners.
Atomic itself writes checks typically of between $200,000 and $2 million.
Altogether, the firm’s companies employ something like 450 people, and earlier this year, cofounder Jack Abraham told Forbes that Atomic’s debut fund had an annualized internal rate of return of 65 percent (meaning that’s how much more Atomic’s stakes had grown in value after subsequent investors funded its companies and marked up their valuations).
Presumably, given its portfolio companies’ more recent fundings, it’s now higher. (Naturally, these returns are all theoretical until real cash is returned to investors.)
Let’s assume that much credit is owed to the ideas themselves. Atomic also seems to be clicking thanks in part to a model that’s similar to that of Andreessen Horowitz, which famously features sophisticated back-office functions to help its portfolio companies.
Atomic also has employees who handle accounting and finance for its startups, for example. It also provides them with in-house public relations and human resource and recruiting muscle. Atomic just happens to be bringing the model to the most nascent stages of company building, when most founders might otherwise be working out of a coffee shop and juggling these various pieces on their own.
Atomic has four partners, including Abraham, who previously sold his company Milo.com to eBay; Andrew Dudum, who co-created the Ever app and previously led product at a company called TokBox; Chester Ng, who founded an app development company called SweetLabs and served briefly as an entrepreneur-in-residence with Trinity Ventures; and Andrew Salamon, who previously worked for the hedge fund Bridgewater Associates. Today Salamon is a partner with Atomic, as well as the cofounder and CEO of a sleep-tracking startup called Rested, another of Atomic’s portfolio companies.
Rested has raised $7.4 million to date, including from Cherubic Ventures.