Angel investment in Irish start-ups is up 25pc

9 Mar 2017

From left: Angel investor Bernard Collins with John Phelan, national director of HBAN. Image: John Ohle

When seed funding dried up, the angels came to the rescue.

Business angels invested €13.6m in 50 Irish start-ups in 2016, up 25pc on the previous year, according to the Halo Business Angel Network (HBAN).

This includes €1.5m (£1.3m) invested in eight deals by Halo Northern Ireland angel investors.

‘There was a significant drop in the value of seed funding available in the last couple of years, leaving promising start-ups struggling to source funding’

HBAN’s annual report for 2016 reveals that the investments leveraged a further €20.5m from other public and private funds, bringing the total invested to €34.1m.

As seed capital funds waited to be replenished last year, individual angel investments increased.

The report said that while the number of companies receiving angel investment did not fluctuate from previous years, angels did invest greater sums of money in those companies.

The average angel investment last year was €272,000, considerably higher than the 2015 average of €217,000.

When investment from other sources is included, this is an average investment of €700,000 per company.

Closing the funding gap

“What’s so impressive about these results is that, at a time when there was a shortage of seed funding in Ireland, the average business angel investment per funding round increased by 25pc,” said John Phelan, national director of HBAN.

“There was a significant drop in the value of seed funding available in the last couple of years, leaving promising start-ups struggling to source funding.

“We were delighted to see that our business angels played a significant role in closing that funding gap by increasing the amount they invested.

In total, HBAN, a joint initiative of InterTradeIreland and Enterprise Ireland, organised 51 funding events throughout the country last year.

The events saw pre-qualified high-potential start-ups pitch to HBAN-registered angels in the hope of receiving investment. Companies that were successful last year included Pundit Arena, Glofox, Soopapets and DiaNia Technologies. Key sectors included ICT, healthcare, consumer products and food.

Since 2007, HBAN angels have invested €73m in 362 separate deals. When the €113m invested by other funds in those deals is added, this is an overall total of €186m invested in Irish start-ups in the last 10 years.

“This not only reflects the value of angel funding to the Irish economy, but also the quality of companies that we introduce to our angels. We only introduce angels to start-ups that we have identified as high-potential businesses. That is why, last year, a quarter of all businesses that pitched to HBAN-registered angels received funding.

“Every year, hundreds of promising Irish start-ups approach us looking for smart money – in other words, funding that is paired with deep domain knowledge and mentorship from investors with specific industry expertise.

“With the start-up community showing no signs of slowing down, we are constantly on the lookout for more angels to join our network and we expect to be announcing even more positive results this time next year,” Phelan said.

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