Since credit crunch began Irish firms raised €1.7bn from venture capital sector

23 Oct 2013

Venture capital is now the main source of funding for innovative SMEs in Ireland, with €1.7bn raised by 800 firms since the credit crunch began in 2008. According to the Irish Venture Capital Association’s VenturePulse survey, SMEs raised €113m in the second quarter of this year, up 74pc on last year.

Total funds raised in the first half of 2013 were €164.9m compared to €116.7m in the same period last year, an increase of 41pc.

“The Irish venture capital community continues to be the main source of funding for Irish innovative SMEs both through direct investment and as the local lead investor for international syndicate investors,” said Regina Breheny, director-general of the IVCA.

“Since the onset of the credit crunch in 2008, approximately 800 Irish SMEs raised venture capital of €1.7bn.”

Mark Horgan, chairman, IVCA, added: “This is a tremendous performance and bodes well for the Irish economy, especially when one considers that activity in international markets is still experiencing significant volatility, in the US second-quarter numbers are down 9pc.”

Irish seed funds close to being fully invested

First-round funding was 24pc of funds raised compared to 15pc in 2012. However, Stephen Keogh, a corporate partner in William Fry, which acted as legal advisers in more than half of the funding rounds in the second quarter, added that the Irish Seed Funds, supported by the banking sector and Enterprise Ireland, are close to being fully invested.

“These funds will need to be renewed if Irish entrepreneurs are to be supported as actively as in the last five years,” he said.

The IVCA VenturePulse survey shows that Irish companies raised €112.8m from investors in Q2 2013, despite the continuing global credit crunch. This compares with funds raised of €64.6m in the same period of 2012. Total funds raised in H1 2013 is €164.9m compared to €116.7m in H1 2012, an increase of 41pc.

In Q2 2013, early stage companies raised seed capital of €26.9m (24pc of funds raised). This compares with €9.6m (15pc of funds raised) in Q2 2012.

Total seed funds raised in H1 2013 is €34.2m (21pc of total funds raised). This compares to €22.9m (19.6pc of total funds raised) in the same period in 2012.

John Kennedy is a journalist who served as editor of Silicon Republic for 17 years