Irish tech companies raise record venture capital funding of €778m in first half of year 

Irish tech companies raise record venture capital funding of €778m in first half of year

– But IVCA VenturePulse survey reports slowdown in second quarter and 50% drop in overseas investment

Dublin; 14:00 hrs; Sunday, 11th September, 2022: Venture capital investment into Irish tech firms in the first half of the year rose by 21% to a record €778.1m, according to the Irish Venture Capital Association VenturePulse survey published today in association with William Fry. However, this was largely due to a stellar first quarter when funding reached €379.7m. Funding in the second quarter rose by under 2% to €398.4m.

“It was a strong first half overall for Irish tech companies raising funds, especially when one considers the geopolitical and economic headwinds and downturn in publicly quoted technology stocks over this time,” commented Leo Hamill, chairperson, Irish Venture Capital Association. “It remains to be seen whether the significant slowdown in growth in the second quarter to under 2% heralds a more difficult second half to the year.”

Leo Hamill, Investec Ventures.
Photo Fennell Photography / Copyright 2022

He also highlighted a 50% fall in funding from overseas investors which fell to €152m from €303m in the second quarter. “This over reliance on foreign investment threatens Ireland’s ability to continue to develop indigenous world-class technology companies. The tide of available global capital is starting to go out, which highlights the importance of our pre-budget submission recommending measures to boost domestic sources of funding.”

Seed funding, which represents early stage first round investments, fell by 7% to €47.1m in the first half, from €50.5m in the same period last year.

Sarah-Jane Larkin, director general, Irish Venture Capital Association, said that there had been a recovery in the second quarter although she cautioned that it was from a low base. Seed funding in quarter two rose by 77% to €24.8m from €14m.

DC 09/02/22
Sarah-Jane Larkin of ICVA
Pic Diane Cusack

“We are optimistic, however, that this upturn in important seed funding will continue as the Government’s €90 million fund for Irish start-ups comes on stream in the second half.”

Deals under €1m fell by 19% in the first half to €21.1m from €26.2m last year. Transactions in the €1-5m category dropped by 9% to €83.6m from €91.9m. Deals in the €5-10m range fell by 43% to €44m from €77.7m.

The overall growth for the half year was due to an increase in deals in the €10-30m range which grew by 50% to €257.5m, from €171.3m and in the over €30m range which increased by 36% to €371.7m from €274m.

“Based on deal sizes, it’s quite hard to analyse what’s going on in the market until we see the results from the next two quarters,” said Sarah-Jane Larkin. “If the larger deals fail to come through in the second half, then we could start to see a downturn overall. But while large deals are important, it’s vital that early stage firms and those looking to raise under €5m can source funding.”

Fintech led the way in the first half of the year raising €220.3m or 29% of the total. This was followed by software on €187m (24%). Life sciences accounted for €134.6m or 17% overall in the first half.

Press queries to:
Sarah-Jane Larkin,director general, IVCA,
Mob: 087 320 9209
Ronnie Simpson, Simpson Consulting,
Mob: 086 855 9410
Note to editors – how the VenturePulse survey is compiled
The Irish Venture Capital Association VenturePulse survey is recognised as the definitive source of fundraising activity in Ireland by the VC industry and by government and international bodies including the OECD.The data covers equity funds raised by Irish SMEs and other SMEs headquartered on the island of Ireland from a wide variety of investors.
This research is the result of detailed information supplied internally by members of the Irish Venture Capital Association and from published information where IVCA members were not involved.
About the Irish Venture Capital Association
The Irish Venture Capital Association is the representative organisation for venture capital and private equity firms in Ireland. An independent DCU report released in January 2020 found that Irish venture capital and private equity firms have invested €5bn in Irish SMEs since 2003 and, through syndication, have attracted in a further €3bn in funding from international firms. This supported the state’s investment through its agencies’ Enterprise Ireland and the Irish Strategic Investment Fund and geared up investment through the Seed & Venture Capital Programme by almost 16 times.