Venture capital funding falls by 20% in third quarter to €136m but strong growth in deals under €10m
Investment up by 3.7% to €566m in first nine months
Quarterly decline driven by drop of 40% in deals above €10m
Strong recovery in seed and deals under €10m
Dublin, Thursday, 5th December, 2019: Overall venture capital funding into Irish firms fell by 20% to €136m in the third quarter of 2019 compared to last year, according to the Irish Venture Capital Association VenturePulse survey published today in association with William Fry.
Funding for the first nine months of the year rose slightly by 3.7% to €566m from €546m in the same period last year.
“There has been a notable decline in larger deals, above €10m so far this year,” commented Neil McGowan, chairman, Irish Venture Capital Association. “But these deals are lumpy by nature. Thanks to Government support, there has been a strong recovery in seed funding and deals below €10m which is very pleasing to see.”
He referred to a 36% increase in the number of companies achieving investment up to €10m. This rose from 139 in the first nine months of 2018 to 189 in 2019. This figure is also up 11% for the quarter versus the same period last year.
Seed funding in the third quarter is up 30% on the same period last year. The number of companies which have raised seed funding this year to date is up 90%.
Sarah-Jane Larkin, director general, IVCA, highlighted a decline in the proportion of funding coming from overseas investors with a fall of 60% for the quarter and 40% in the year to date.
“This is again due to the decline in the number and amount of investment in larger funding rounds. Major overseas venture capital investors are less attracted by deals below €10m which have characterised the Irish market this year.”
She said that the reduction in overseas investment emphasised the need to introduce policy initiatives to unlock greater local private sector funding into domestic innovative companies, as happens in other European countries.
“While they remain an important player in the Irish market, as a nation we should not be overly dependent on overseas investors but create the environment locally to create Irish multinational companies.”
Software accounted for 34% of funding in the third quarter. A surprising entry in the top three was food and drink at 26%, partly due to a number of whiskey firms raising funds including West Cork Distillery (€15m), Nephin (€2.5m) and Chapel Gate (€1m). Life sciences accounted for 14%.
Press queries to:
Sarah-Jane Larkin, director general, IVCA, Email: [email protected]
Mob: 087 320 9209 or
Ronnie Simpson, Simpson Consulting, Email: [email protected]
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.
Since the onset of the credit crunch in 2008, in excess of 2,500 Irish SMEs have raised venture capital and private equity of €5bn.
These funds were raised almost exclusively by Irish VC and PE fund managers who during this period supported the creation of up to 20,000 jobs and attracted over €2.5bn of capital into Ireland. 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.