Irish tech companies raise record venture capital funding of €778m in first half of year
IVCA VenturePulse survey reports slowdown in second quarter and 50% drop in overseas investment
Trade
Sarah-Jane Larkin, IVCA
Venture capital investment into Irish tech firms in the first half of the year rose by 21% to a record €778.1 million, 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 €379.7 million. Funding in the second quarter rose by under 2% to €398.4 million.
Fintech led the way in the first half of the year raising €220.3 million or 29% of the total. This was followed by software on €187 million (24%). Life sciences accounted for €134.6 million or 17% overall in the first half.
Deals under €1 million fell by 19% in the first half to €21.1 million from €26.2 million last year. Transactions in the €1-5 million category dropped by 9% to €83.6 million from €91.9 million. Deals in the €5-10 million range fell by 43% to €44 million from €77.7 million.
The overall growth for the half year was due to an increase in deals in the €10-30 million range which grew by 50% to €257.5 million, from €171.3 million and in the over €30 million range which increased by 36% to €371.7 million from €274 million.
“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, director general, Irish Venture Capital Association. “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 €5 million can source funding.”
Seed funding, which represents early stage first round investments, fell by 7% to €47.1 million in the first half, from €50.5 million in the same period last year.
Larkin added 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 €24.8 million from €14 million.
“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.”
“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.”
Hamill also highlighted a 50% fall in funding from overseas investors which fell to €152 million from €303 million 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.”
TechCentral Reporters
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