Irish venture capital investments up 24pc in Q1

7 May 2009

There was a 24pc year-on-year increase in the amount of venture capital (VC) raised by Irish companies in the first quarter of 2009. For the full year 2008, the amount raised was €243m, a 7pc increase.

“This compares very favourably to fund-raising in the US and UK, which is down in the first quarter,” commented Regina Breheny, director general, Irish Venture Capital Association (IVCA), on her organisation’s latest VenturePulse survey.

She said first-quarter 2009 figures recently released by the NVCA in the US show activity in the US down 61pc in dollar terms and down 44pc in company numbers raising funds.

“In the UK, data sources are reporting similar declines of up to 70pc, so not all the financial news coming out of Ireland is bad,” Breheny said.

She added that there were funds available for good start-ups, as the figures show that first-round funding in Ireland was 30pc of funds raised, compared to 20pc in the US.

For the year 2008, 93 technology firms raised €243m. “This is 7pc up on 2007 and in the teeth of the global credit crunch,” commented Joe Concannon, chairman, IVCA.

He added that figures from the UK suggested that total funds raised there in 2008 came to €885m, excluding pharma/bio.

“When you consider the respective sizes of the economies, this suggests that Ireland is punching much bigger than its weight internationally, and nurtures some hope in striving towards the goal of creating a ‘smart economy’ here.

“The Government’s move to invest in university R&D may be starting to see benefits,” Concannon added.

The €53.5m raised in 2008 compares with funds of €43.3m raised during the same period of 2008, and to €33m in the same period in 2007. This is an increase of 23.5pc in activity over 2008.

The number of companies that raised funds in Q1 2009 period was 32, compared to 24 in the same period in 2008 and to 14 in 2007. Amounts raised ranged from €50,000 to €18m.

In Q1 2009 there were 15 Irish-based VC funds and private investors involved (47 investments) and 10 international funds and private investors (10 investments).

In the pharma/biotechnology sector, four companies raised €23.5m. In the drug delivery and medical device sector, four companies raised €2.3m. In the telecoms sector, four companies raised €5m.

In the environment technology sector, three companies raised €9.6m.

In other technology sectors, including nanotechnology, fibre optics, photonics and semiconductor chips servicing a wide range of industries, five companies raised €3.3m.

In the business services sector, four companies raised €2.2m. Eight companies in a variety of other technology-related sectors raised €7.6m.

During the first quarter of 2009, 12 companies raised €15.9m, or 30pc of funds raised; in 2008 six companies raised €7.6m, or 18pc of funds raised.

By John Kennedy