Venture capital funding falls 5% to €430m in first half – IVCA report

Venture capital funding into Irish tech firms fell by 5% to €430m for the first half of the year to June, according to the Irish Venture Capital Association VenturePulse survey published today in association with William Fry. However, there were signs of a recovery in the second quarter with funding up over 90% to €233m.

“While funding in the first half was down, it rebounded strongly in the second quarter compared to last year. However, it should be noted that investment in the second quarter of last year was particularly low. With Government policy input we hope the recovery can continue,” commented Neil McGowan, chairman, Irish Venture Capital Association.

“In the light of so many international economic uncertainties, it is vital to grow and encourage our indigenous base in an environment where we are probably over-reliant on Foreign Direct Investment. This dependence is reflected in the fact that multinational companies contributed 77% to last year’s corporation tax take.”

Sarah-Jane Larkin, director general, Irish Venture Capital Association added that the positive underlying trend is reflected in the fact that the number of companies raising funds increased by almost 50% from 93 in the first half of 2018 to 139 to June this year.

She added that vital seed funding to early-stage companies rebounded strongly, more than doubling to €38m in the first half of 2019 from €16m in the same period last year.

For the first six months of 2019 software accounted for 45% of total funding followed by life sciences at 25%. Fintech investments reached almost 10% of the total for the first time.

Sarah-Jane Larkin said that since the onset of the credit crunch in 2008, in excess of 2,500 Irish SMEs have raised venture capital and private equity of €5bn.

These funds were raised almost exclusively by Irish VC and PE fund managers who during this period supported the creation of up to 20,000 jobs and attracted over €2.5bn of capital into Ireland. This supported the state’s investment through its agencies’ Enterprise Ireland and the Irish Strategic Investment Fund and geared up investment through the Seed & Venture Capital Programme by almost 16 times.

The Irish Venture Capital Association is the representative organisation for venture capital and private equity firms in Ireland.