IVCA data reflects momentum in fourth quarter as funding more than trebles to €458m.

Venture capital investment into Irish tech startups and SMEs reached a record €1.3bn in 2021, up 44% from €925m the previous year, according to the Irish Venture Capital Association VenturePulse survey, published in association with William Fry. 

The momentum is reflected also in a record fourth quarter in which funding more than trebled to €458m from €139m. 

'Strong post-pandemic jobs recovery'

Nicola McClafferty, chairperson, Irish Venture Capital Association

Nicola McClafferty, chairperson, Irish Venture Capital Association, said: “The indigenous tech startup and SME sector appears to be well positioned to benefit from and contribute to a strong post-pandemic jobs recovery. 57% of funding in 2021 came from overseas investors, highlighting the continuing appeal of Irish tech firms and their ability to compete on a world stage.” 

She added that the positive news was reflected in  seed or first round funding, which is primarily locally provided, which grew by 60% in 2021 to €130.7m from €81.5m the previous year. 

The number of deals in 2021 increased by 20% to 279 from 233 last year. “The 20% increase in number and 44% rise in value shows that Irish tech SMEs are raising larger rounds,” said Sarah-Jane Larkin, director general, IVCA. “The largest category increase was in deals between €10-30m which rose to by 66% to €356m in 2021 compared to €214m the previous year. 

Largest deals in 2021 included diagnostics firm Let’s Get Checked (€123m); medical devices company Mainstay Medical (€89m); fintech firm Wayflyer (€62m); software analytics company Kitman Labs (€52m) and professional services firm Doran & Minehane (€50m).    

The fourth quarter figure of €458m was the highest on record. The number of deals rose by almost a third to 71 from 54 in the same quarter the previous year.  

Sarah-Jane Larkin, director general, IVCA

'Now more broadly spread and diversified'

Life sciences led the way in the fourth quarter raising 38% of funding (€174m). This was followed by software (17%); business services (12%); food and drink (11%); fintech (9%); ICT (7%); cyber security (1%) and other (6%).  

“We have never witnessed such a wide range of sectors raising venture capital or private equity, reflecting the fact that Irish high-growth SMEs are now more broadly spread and diversified than in the past,” said McClafferty. 

The only sector to decline in the fourth quarter was in the less than €1m category which was down 35% as overall deal sizes increased. Deals in the €1-5m category were up by 151%, growing to €68m from €27m in 2020.

Seed funding more than doubled to €49m from €19m in the same quarter 2020. There were increases in all other deal sizes, notably those more than €30m which grew in value by more than 400% to €219.5m from €42m.