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VC funding into Irish SMEs falls by 10% to €578.4m in first half – IVCA
Dublin; 2:00pm, Sunday, 13th September, 2026: Venture capital funding into Irish SMEs fell by 10% to €578.4m in the first half of 2026, according to the Irish Venture Capital Association VenturePulse survey published today in association with William Fry. While the second quarter showed an increase of over 200% to €356.7m, this compares to the same period last year which was the worst in ten years.
Richard Watson, IVCA chairperson, said: “International investment as a percentage of the total reached 82% for the first half and 80% for the quarter. These levels are flashing red warning signals as they represent some of the highest on record and emphasise our over exposure to overseas investors.”
He added that ongoing global geopolitical instability, including the Iran war, as well as US capital concentration in mega AI deals, could well impact future international VC investment into Ireland. “Just two frontier AI companies, Anthropic and OpenAI, sucked up 43% or $217 billion of global start-up funding in the first half1.”
Sarah-Jane Larkin, director general, and Richard Watson, chairperson, Irish Venture Capital & Private Equity Association. (Photo Fennell Photography)
Sarah-Jane Larkin, director general, IVCA, said that all deal ranges in Ireland below €5m fell in the first half. “This and the lack of any deals in the €10-30m range in the second quarter highlight the extent to which the dearth of domestic sources of funding is limiting capital formation, even with the support of the Seed & Venture Capital Scheme.”
Deals between €3-€5m fell by 58% to €21.5m from €50.7m in the same quarter last year. Seed funding, or first rounds by SMEs, fell 23% to €50m.
Life sciences and fintech companies led the way in funding in the first half of the year in Ireland, both accounting for 26% of the total; followed by cybersecurity and software (both 14%).
AI and machine learning represented 7% of the first half total. “This does not mean we are being left behind in AI,” commented Sarah-Jane Larkin. “It is unrealistic to expect a small nation like Ireland to produce the giant platform and frontier AI leaders of the US. But AI is now embedded in the products and services of the vast majority of local VC backed SMEs.”
Two companies, fintech provider Fonoa (€94.4m) and cybersecurity firm Cloudsmith (€61.5m) accounted for almost 44% of the Irish second quarter total. Other major rounds in the quarter were SaaS provider CameraMatics (€49m) and drone delivery company Manna (€43m).
Ends
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
Notes to editors:
Venture capital refers to equity investment. IVCA VenturePulse data excludes debt, including venture debt, which covers loans to early-stage, high-growth companies already backed by venture capital.
How the VenturePulse survey is compiled
The Irish Venture Capital Association VenturePulse survey is recognised by the venture capital industry, government and international organisations, including the OECD, as the definitive and most up-to-date source of fundraising activity in Ireland.
The data covers equity funding raised by Irish SMEs and other SMEs headquartered on the island of Ireland from a broad range of investors.
This research is based on the latest detailed information supplied by members of the Irish Venture Capital Association, together with published information for rounds in which IVCA members were not involved. A list of the funding rounds included in the total will be available on the IVCA website (ivca.ie).
About the Irish Venture Capital & Private Equity Association (ivca.ie)
The Irish Venture Capital & Private Equity Association, which marked its 40th anniversary last year, is the representative organisation for venture capital and private equity firms in Ireland.
An independent DCU report found that Irish venture capital and private equity supported the state’s investment through its agencies’ Enterprise Ireland and Irish Strategic Investment Fund and geared up investment through the Seed & Venture Capital Programme by almost 16 times.
The study estimates that employment numbers in venture and private equity backed firms grow by an average of 27%, compared to an overall increase in employment in the economy of just over 3% per annum over a similar time period.
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