The total amount of venture capital (VC) invested in Irish small and medium sized tech businesses rose 1 per cent in the third quarter, with a bounce in smaller rounds, new figures indicate.
Irish figures bucked international trends, with global VC funding falling 15 per cent year-on-year.
The Irish Venture Capital Association (IVCA) Venture Pulse survey showed a total of €192 million was invested in tech SMEs here in the third quarter. Among the largest deals were €18.2 million invested in medtech company Neurent Medical, €15 million raised by renewable energy firm Circal, and medtech firm Loci Orthopaedics’ near €14 million raise.
The number of deals overall rose, with those under €10 million seeing a bump. Deals in the €3-€5 million range rose by 52 per cent to €29 million, while those under €1 million rose by nearly a third to €9 million. There was also a jump in seed funding rounds, which more than doubled to €33.5 million.
IVCA director Sarah-Jane Larkin said the support for early-stage firms was “positive”, while the average deal size has fallen since 2018 in comparison to other European countries, providing a warning signal.
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“Drip feeding of small rounds is not efficient. As a result the proportion of Irish firms going out of business is higher than the European average,” she said. “Access to public capital for VCs through the likes of EI (Enterprise Ireland) and ISIF (Ireland Strategic Investment Fund) in Ireland and EIF (European Investment Fund) in Europe has never been better.”
However, there is now a severe shortage of matching private capital in Ireland from investors such as pension funds, family offices and corporates. Government policy can have a significant impact in fixing this, as is happening in the UK, and in several European Union countries such as Denmark and France.”
Funding for the nine months to the end of September was down 18 per cent to €945.3 million, and international VC funding into Ireland fell by 24 per cent in the year to the end of September
The industry is also warning of the potential impact of the incoming Trump administration on international investment. Some 44 per cent of the quarterly sum invested was accounted for by international venture capital funds.
“These underlying trends reflect a buoyant ecosystem in Ireland for early-stage companies, many of which are involved in cutting-edge technologies such as artificial Intelligence, cyber security, quantum computing, medtech and envirotech,” said Gerry Maguire, chairperson, Irish Venture Capital Association.
“However, the potential for an isolationist leaning incoming administration in the White House to implement policies that could be negative for Ireland emphasises the need for us to take these indigenous companies to the next level and grow our own tech champions rather than rely on less committed overseas investment.”
The leading sector over the nine months was life sciences, which accounted for 42 per cent of the total raised, followed by envirotech, regtech, fintech and software.
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