Irish technology firms raised €994m in funding in 2017, according to the Irish Venture Capital Association VenturePulse survey published today in association with William Fry. This represents an increase of 12% on the previous year.
“While 2017 was a record year it is worth noting that the year-on-year growth rate of 12% compares to a 70% growth rate in 2016 so there is no room for complacency,” commented Peter Sandys, chairman, IVCA. “With continuing uncertainties over the impact on Ireland of Brexit, lower US corporation tax rates and possible US trade wars it is more important than ever that we continue to build an indigenous knowledge-based economy.”
The IVCA VenturePulse survey finds that technology-based SMEs raised €177m in the fourth quarter 2017. This compares to €154m in the same period 2016.
Sarah-Jane Larkin, director general IVCA, said that growth/expansion funding represented 85% of total funds raised. “It is noteworthy, however, that seed/early stage grew significantly reaching a high of €131m for the year, up from €70.2m in 2016.”
Ms Larkin pointed out that international investors accounted for 63% of the funding raised by Irish SMEs in 2017. “It is important to recognise the role of Irish based venture capital firms both through direct investment and as the local lead investor for international syndicate investors.
“International VCs are often encouraged by the due diligence implications of early-stage funding by a local VC.”
She said that the sectoral spread of investments in 2017 reflects Ireland’s growing tech capability and clusters that have developed like the medical device sector in Galway. Venture capital investment in 2017 was concentrated on Software (28%), Life Sciences (23%) and FinTech (18%) with many innovations underpinned by Artificial Intelligence and analytics.
Ms Larkin added that since the onset of the credit crunch in 2008, in excess of 1,400 Irish SMEs have raised venture capital of €4.5bn. These funds were raised almost exclusively by Irish VC fund managers who during this period: supported the creation of up to 20,000 jobs, attracted over €2bn of capital into Ireland and geared up the State’s investment through the Seed & Venture Capital Programme by almost 16 times.
Summary – Funds raised
The IVCA VenturePulse survey shows that Irish companies raised €994m from investors in 2017. This compares with funds raised of €888m in 2016 and €522m in 2015.
Fourth quarter funds raised in 2017 were €177m compared to €154m in the same period 2016.
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