Atlas Venture announces fund cutback

The international technology investor is to reduce the size of its latest fund by 12 per cent due to slow deal flow in the sector.

Atlas Venture, the venture capital firm which specialises in technology investments, has informed investors of plans to reduce the size of its Atlas Venture Fund VI by twelve per cent following a reduction in the number of opportunities in the sector.

Financial News reports that the early stage fund, which closed at $967m in April 2001, will release backers from their commitments as it cuts the size of the fund by an eighth to $850m.

Atlas says the reason for the reduction of the fund is not one of lack of opportunities and is more an attempt by the fund to focus on portfolio companies, thereby reducing capital requirements for follow-on investment. The firm will still aim to make five deals per quarter. 

The news from Atlas continues the trend in recent months to scale back commitments in light of lower valuations and fewer opportunities to deploy capital. Last month, US technology venture capital firm Benchmark Capital confirmed a cut the total size of its European fund from $750m to $500m.