Angel investment in Ireland now higher than 2019 levels, says HBAN

29 Oct 2021

All-island director of HBAN, John Phelan. Image: HBAN

A rise in angel activity is promising for the island’s start-ups after a rough year in 2020.

Angel investment activity in Ireland’s start-up sector has surpassed pre-pandemic volumes as restrictions ease and the economy opens up.

The Halo Business Angel Network, or HBAN, reported a 13pc increase in total angel investment in the first half of this year compared to the same period in 2019, with €8.38m in funding given to Irish start-ups by angel backers.

The figure includes investments in the Republic and Northern Ireland. It brings HBAN’s total contribution to the island’s start-up sector to more than €400m since its inception in 2007, when including angel investment and other funding sources that HBAN helped start-ups to leverage.

Average angel investment per funding round stood at €324,500 in the first six months of 2021, which is 29pc higher than the 2019 figure of €251,000. Individual angels invested an average of €44,000 each, with many first-time angel investors participating at the more accessible €25,000 range.

The number of start-ups to benefit from HBAN investments in H1 has jumped from 29 in 2019 to 37 in 2021, despite the ongoing challenges posed by Covid-19.

“We have seen previously that times of crisis inspire a spirit of entrepreneurism and the first half of this year is testament to the quality of start-ups that are pitching to our angel investors,” said HBAN all-island director John Phelan.

“To maximise potential returns for our angels, each company is assessed and mentored by our team to ensure that they are investor-ready before pitching.”

A joint initiative of Enterprise Ireland, Invest NI and InterTradeIreland, HBAN aims to promote angel investment on the island and has a network of 600 angel investors.

It is managed by Dublin Business Innovation Centre (BIC) in partnership with regional BICs in Cork, Galway and Waterford, as well as Clarendon Fund Managers in Northern Ireland.

Increase in angel activity

A TechIreland report last year highlighted that Irish tech start-ups continued to raise funding during the pandemic. But it said there was evidence that early-stage companies were finding it “particularly difficult” to secure backing.

HBAN reported a dip in 2020 investments, with only €14m pumped into 59 Irish early-stage start-ups last year. Average deal size for investors was €250,000 and common areas for investment were medtech, ICT and manufacturing.

“Aside from the funding, the increase in angel activity is a good sign for start-ups in Ireland, as angel investors also offer industry-specific guidance and contacts that are so vital for businesses in their early years,” Phelan said in regard to the latest figures.

“Angel investment is also important in helping start-ups to leverage funding from additional sources that they wouldn’t otherwise have access to. We are very excited to pass the €400m milestone and look forward to reaching half a billion in the near future,” Phelan said.

Some of the companies HBAN has helped fund so far this year include Belfast-based hiring software company, which secured £300,000, and Irish online home buying platform Lintil, which raised €270,000 through HBAN’s Kerry branch.

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Vish Gain is a journalist with Silicon Republic