Irish technology companies raised a record €734 million from investors for the nine months to end September 2016 or 77% ahead of the €415m over the same period last year according to the Irish Venture Capital Association Venture Pulse survey published today in association with William Fry. In the third quarter (to September) Irish firms raised €248m compared to €108m in the same quarter last year.
“A particular feature in 2016 has been the strong performance by the life sciences sector which accounts for 54% of total funds raised, boosted by an 80% concentration in Q3,” commented Michael Murphy, chairman, Irish Venture Capital Association.
“The life sciences sector in Ireland is showing signs of maturity and is benefiting from the State’s investment in R&D through Science Foundation Ireland. Compared to the IT sector, these companies in general require significant amounts of funds to build out product and to grow a business. It is significant to note that they are raising the required funds from Irish and international investors, thus validating the R&D and the expertise in Ireland.”
Regina Breheny, director general, IVCA added that significant international funds continue to be attracted into the Irish tech sector with local venture capital companies playing a key role.
“The Irish venture capital community continues to be the main source of funding for Irish innovative SMEs both through direct investment and as the local lead investor for international syndicates who invested €123m in the third quarter bringing the total for the nine months to end September 2016 to €328m. This compares to investment by international syndicates of €225m in the same nine month period in 2015.”
Growth/expansion funding was 94% of total funds raised in the third quarter. However, Ms Breheny said that new seed funds are starting to have an impact.
“First round seed funding is growing again and at €57m for the nine months to end September are exceeding the peak levels of 2013.”
Overall she said that since the onset of the credit crunch in 2008, in excess of 1,350 Irish SMEs raised venture capital of €3bn. These funds were raised almost exclusively by Irish VC fund managers who during this period have supported the creation of up to 20,000 jobs; attracted over €1.3bn of capital into Ireland and geared up the State’s investment through the Seed & Venture Capital Programme by almost 16 times.