Venture capital funding up a third to €332m in first quarter
– But IVCA VenturePulse survey suggests that a few large deals may mask underlying softness
Dublin, Wednesday, 9th May, 2018: Irish technology firms raised €332m in the first quarter of 2018, according to the Irish Venture Capital Association VenturePulse survey published today in association with William Fry. This is an increase of 34% on the same period last year when €246.7m was raised.
Despite the headline figures, Irish Venture Capital Association chairman Peter Sandys warned that a number of large deals may have disguised a softening in the market.
“The significant jump in funding raised year on year is primarily due to two €100m funding rounds at Limerick based AMCS and Dublin based Intercom. The second quarter will give us a better picture as to whether we’re witnessing an underlying softness in 2018.”
He said that the first quarter suggested no room for complacency and that international uncertainties made it more important than ever to continue to build a strong indigenous technology sector.
Sarah-Jane Larkin, director general, IVCA, said that Irish technology firms continued to attract strong overseas interest especially from the US. “The Irish venture capital community continues to be the main source of funding for Irish innovative SMEs both through direct investment and as the local lead investor for international syndicate investors who invested €195m or 58% of total funds raised in the first quarter 2018.
“It is significant that much overseas investment has come across the Atlantic from the US rather than from Europe and has funded larger deal rounds. This lack of capital in the European market was highlighted recently when the European Commission announced a pan-European venture capital fund of finds programme called Venture EU, aimed at triggering increased availability of capital and doubling the amount of venture capital currently available across Europe.”
She added that a concern emerging in the first quarter is the lack of seed investments made, just 1% of the total, and down 50% on the same period in 2017. Additionally, there has been a decline in deals below €5m of 16% in number and 28% in value.
Software and Lifesciences lead the pack with 33% and 23% of funds raised respectively.
Since the onset of the credit crunch in 2008, in excess of 1,400 Irish SMEs have raised venture capital of €4.8bn. These funds were raised almost exclusively by Irish VC fund managers who during this period: supported the creation of up to 20,000 jobs, attracted over €2bn of capital into Ireland and geared up the State’s investment through the Seed& Venture Capital Programme by almost 16 times.
The IVCA VenturePulse survey shows that Irish companies raised €332m from investors in Q1 2017. This compares with funds raised of €246.7m in Q1 2017, €237.4m in Q1 2016, €119.8m in Q1 2015, and with €145.4m in Q1 2014.
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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.