HBAN investments down slightly in 2020 amid the pandemic

28 Jan 2021

John Phelan, director of HBAN. Image: John Ohle

Angel investors pumped €14m into 59 Irish early-stage start-ups during a tumultuous year for businesses.

Angel investors in Ireland invested €14m in early-stage start-ups in 2020, a decline on the previous year, according to the Halo Business Angel Network (HBAN).

New figures from HBAN, a network of angel investors coordinated by Enterprise Ireland, InterTradeIreland and Invest Northern Ireland, show that its members invested €14m in 59 companies in 2020 amid the pandemic. In 2019, the figure was €16.8m in 66 start-ups.

‘History shows us that some of the most successful and innovative businesses are founded during difficult trading times’

In 2020, the average deal size for investors was €250,000 and common areas for investment were medtech, ICT and manufacturing.

Some of the start-ups that HBAN’s investors backed last year include digestive health tech start-up FoodMarble and Kilkenny fintech outfit Loanitt.

John Phelan, all-island director of HBAN, said angel investing remained relatively consistent in Ireland and Northern Ireland during the difficult year. While the world grappled with the uncertainties of 2020, HBAN added 100 new angel investors to its network and launched the Kerry Angel Network.

“The figures for 2020 illustrate that a high level of angel investing was sustained across the island during 2020, irrespective of external variables brought on by the pandemic,” Phelan said.

“As Irish start-ups continue to contend with the reality of Level 5 restrictions, there is an immediate opportunity for current and prospective angel investors to drive a new wave of innovation forward. History shows us that some of the most successful and innovative businesses are founded during recessions and difficult trading times,” he said.

The group, which will be holding its annual conference online next month, is issuing a call for more investors to join its network and invest in early-stage start-ups through its various syndicates.

“What we have seen in the UK is that angel investing has endured irrespective of the pandemic-induced challenges. In fact, over half of angels surveyed have continued investing since the onset of the pandemic, and 46pc plan to add companies to their portfolio by the end of the financial year,” Phelan added.

HBAN has repeatedly advocated for reforms to the Government’s Employment and Investment Incentive scheme, which provides tax relief to some investors, in order to stimulate more investors to take a punt on early-stage companies.

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.

Jonathan Keane is a freelance business and technology journalist based in Dublin