– Growth driven by strong US interest according to IVCA VenturePulse survey
– Half year investment grows to €641m
Dublin; 14:00 hrs, Sunday, 29th August, 2021: Venture capital investment into Irish tech firms in the second quarter this year hit a record €392m, up 7.6% on the same period in 2020 which was itself unprecedented, according to the Irish Venture Capital Association VenturePulse survey published today in association with William Fry. The survey also reports a record half year to €641m, up 8% from €593m in 2020.
“A feature of the results is that international funding, mostly from the US, rose to 70% of the total in the first half, up 55% on the same period last year,” commented Nicola McClafferty, chairperson, Irish Venture Capital Association. “This is a strong endorsement of the high quality of Irish tech companies and reflects a global interest in them.”
She added, “The worry is that international investment is cyclical and when the tide goes out we will be unable to replicate these funds. We should be looking now to increase the supply of funding from domestic non-traditional VC investors such as pension funds, private investors and corporates as is happening across the UK and other European countries.”
She stressed that this can be achieved at no cost to the Exchequer and urged the Government as part of Budget 2022 to establish a working group to advise on how best to implement this.
Sarah-Jane Larkin, director general, Irish Venture Capital Association, said that funding for the half year had increased across all deal sizes with the exception of those in the €5-€10m range which fell by 10% to €77.7m.
“In terms of the important start-up and early stage companies there was a fall of 47% in the value of deals in the €1m-€5m range in the second quarter to €21.6m and a 42% drop in the number of deals. We hope this was just a temporary blip as the half year performed well with an increase of 15% in the €1m-€5m range to €91.9m and a rise of 19% in the number of deals from 37 to 44.”
Deals below €1m, largely comprised of investment in earlier stage companies, rose by 22% in the first half to €26.2m. The number of deals rose by 16% to 64.
Reflecting a trend across Europe there were significant increases in larger investments in the second quarter. Deals over €30m were up 34% to €185m as a result of investments in life sciences diagnostics company, Let’s Get Checked which raised €123m, and fintech company, Wayflyer which raised €62m. Deals in the quarter over €10m also increased, by 4% to €116m.
Life science companies at 43% were the top fund raisers in the first half of 2021 followed by Software (20%); Fintech (12%); ICT (6%) and Deep tech, or companies founded on a scientific discovery, (4%).
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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.
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.
The study found that employment numbers in venture and private equity backed firms increased by an average of 27% per annum since 2016, compared to an overall increase in employment in the economy of 3.3% per annum over the same time period.