TechIreland: Irish tech companies fundraised a record €932 Million in the first half of 2021

TechIreland has published its Startup Funding Review. It is showing that 101 Irish tech companies raised a record €932 million in the first half of the year from a spread of sources – venture capital, debt finance, grants and crowdfunding.

The headline figure is dominated by some very large rounds. The top 10 largest investments account for 70% and the top five account for half the funding raised. LetsGetChecked raised €123 M, followed by GH Research (€105 M) and Carne Group (€100 M).

There was an increase in the number of early-stage rounds (35 companies each raised between €1M-5M, up from 26 for the same period last year, while another 40 companies raised less than €1M, up from 25 last year). However, in line with the Irish Venture Capital Association’s recent report, early-stage rounds in Q2 fell sharply after a strong first quarter. Overall, the first six months show strong funding at all levels.

As usual, Enterprise Ireland did much of the heavy lifting at the early stage with sterling pre-seed and seed funding support.

As in previous years, the HealthTech sector accounted for a lion’s share of the total – 27 companies raised €439 M, up 80% on the same period last year. Mainstay Medical raised €130 M. Galway based Neurent Medical raised €20 M and 15 other HealthTech companies raised €1-8 M.

FinTech was another big winner. 13 FinTech’s raised €205 M, a 170% increase from last year. The sector has seen some significant developments with Fenergo achieving unicorn status and Taxamo’s acquisition by Vertex.

As in previous years, Enterprise Solutions saw the most number of companies raising funding. 31 companies raised €126 M, up 17% on last year. Other winners were SaaS businesses (€97M) and medical devices (€176 M).

Unsurprisingly, there was a dramatic decline in funding for TravelTech and, somewhat surprisingly, also a decline in CleanTech and artificial intelligence.

While the first half of the year has seen record levels of funding for Irish tech, the report also underlines some key concerns:

—  There is a regional imbalance in funding – Dublin companies took in 82% of the total. Investment going to companies outside Dublin declined from 26% to just 17%. However, there were some notable regional successes; Meath-based Utmost raised €17.5 M, Limerick’s Kneat raised €15 M, Wexford based Scurri raised €9 M. And Northern Ireland had one of its largest investment rounds to date. Belfast startup Cumulus Neuroscience raised €6.9 M. Altogether, 14 Northern Ireland-based companies raised a total €27 M.

—  It was depressing to see that funding for companies with female founders declined from 11% to just 6% of the total. Despite this, there are some really promising companies among the twenty female-led tech businesses that raised investment.

John O’Dea, TechIreland Chief Executive, said: “While the overall numbers are good, we aren’t keeping up with the huge increase in European tech funding. Ireland’s share for the first half of the year has actually dropped from 3.5% to just 1.8%.”

Brian Caulfield of Scale Ireland said: “The big increase in funding came from late-stage deals. Early-stage saw much more modest increases. As always, the headline figures conceal some less-welcome trends. It could be said of H1 2021 that, like the curate’s egg, “parts of it were excellent”.

Niall McEvoy of Enterprise Ireland added: “The first half of 2021 has seen plenty of entrepreneurial resilience in what remains a difficult market. Exciting new opportunities have emerged in Cybersecurity, Privacy, Big Data and Digital Health. The overriding theme has been the digitisation of business via SaaS business models.”

The full report can be accessed here.