Growth driven by strong US interest, as half-year investment grows to €641 million.
Venture capital investment into Irish tech firms in the second quarter this year hit a record €392 million, up 7.6% on the same period in 2020 which was itself unprecedented, according to the Irish Venture Capital Association VenturePulse survey published recently in association with William Fry. The survey also reports a record half year to €641 million, up 8% from €593 million in 2020.
'High quality of Irish tech companies'
“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,” said 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.
“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 €5million to €10 million range which fell by 10% to €77.7 million.
“In terms of the important start-up and early stage companies there was a fall of 47% in the value of deals in the €1 million to €5 million range in the second quarter to €21.6 million and a 42% drop in the number of deals.
Investment in earlier stage companies rose by 22%
"We hope this was just a temporary blip as the half year performed well with an increase of 15% in the €1 million to €5 million range to €91.9m and a rise of 19% in the number of deals from 37 to 44.”
Deals below €1 million, largely comprised of investment in earlier stage companies, rose by 22% in the first half to €26.2 million. 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 more than €30 million were up 34% to €185 million as a result of investments in life sciences diagnostics company, Let’s Get Checked which raised €123 million, and fintech company, Wayflyer which raised €62 million. Deals in the quarter over €10m also increased, by 4% to €116 million.
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%).