Venture Capital Funding Into Irish Smes Falls by Nearly Half in First Quarter

Venture capital funding into Irish SMEs fell by nearly a half (48%) to €258.5m in the first quarter of 2024, compared to €502m in the same period last year, according to the Irish Venture Capital Association VenturePulse survey published today in association with William Fry.

“Despite this fall, investment in the last three quarters has held up well against a backdrop of global uncertainty,” commented Denise Sidhu, chairperson of the Irish Venture Capital Association. “This quarter and the same period last year each included one exceptional deal above €100m. If one excludes these two outliers, then the decrease in Irish funding is in line with global trends, which saw a 20% decline in the first quarter.”

She said that seed funding showed resilience, with very early-stage Irish companies raising €40m. Seed funding represents the first rounds raised by SMEs.

While there was a downturn in funding across the majority of deal sizes, companies looking to raise €1m-€3m enjoyed a positive first quarter. Funding in this sector rose by 126% to €22.7m compared to €10m last year.

Sarah-Jane Larkin, director general, IVCA noted that international funding into Irish SMEs in the first quarter fell by 57% to €184m from €425m last year.

“The Irish ecosystem for getting companies off the ground, including Government and state bodies such as EI (Enterprise Ireland) and ISIF (Irish Strategic Investment Fund), is largely working well. The big challenge is our over-dependence on unpredictable international investors in taking these start-ups to the next level of growth. In this regard, we welcome Minister Michael McGrath’s recent comments on the desirability of unlocking some of the €150 billion in domestic household deposits into more productive use for both the economy and for savers.”

She added that the IVCA’s pre-budget submission would also make a case for allowing pension savers the opportunity to invest in Ireland’s dynamic indigenous start-up tech sector under the planned auto enrolment scheme, as happens in France.
The top five deals in the first quarter were: medical device company Mainstay Medical (€115m); energy transition firm GridBeyond (€42m), fintech software company Halo Technologies (€18.4m); space tech supplier Mybronics (€15m) and medtech company, Cumulus Neuroscience (€13m).

The life sciences sector (62%) led the way in funding this quarter, followed by envirotech (17%) and software (9%).