Figures from the Irish Venture Capital Association show that seed and early-stage deals have recovered partially after a tough 2020.
Early-stage funding deals in Ireland saw a slight bounce back in the first quarter of 2021 after a worrying decline in 2020.
Overall funding in the first quarter of the year, according to deals tracked by the Irish Venture Capital Association (IVCA), stood at €249.4m. This is up 8.9pc from the same period in 2020.
“Funding appears to have shaken off any restrictions caused by Covid-19,” Gillian Buckley, chair of the IVCA, said.
The organisation tracked 74 tech deals in the quarter, up from 48 a year prior, “largely driven by a welcome recovery in early-stage funding”.
The uptick in early-stage funding makes for a change in trends after IVCA’s figures for 2020 sounded alarm bells over a drop in seed and early-stage funding as investors opted to put their money into existing portfolio companies amid the pandemic.
“We hope the more positive outcome in the first quarter is a harbinger of recovery for early-stage funding in 2021,” Buckley said.
Deals valued between €1m and €5m were up from €38m to €70.3m, meanwhile deals under the €1m mark were up from €8.4m to €12.9m year on year.
Some investment rounds that fell into these categories in the quarter were GoContractor’s $5m funding round and Klir raising $3.1m. Both start-ups are focusing heavily on the US market and raised mostly from US investors.
In February, Dublin and London-based fund Frontline Ventures announced a €70m fund to back European start-ups at the seed stage that have internationalising on their minds.
For many early-stage start-ups there is still a reliance on Government funding, namely through Enterprise Ireland, to get their business up and running.
“Government support for start-ups and early-stage companies through Enterprise Ireland and Ireland Strategic Investment Fund is beginning to show a real impact,” Sarah-Jane Larkin, director general at IVCA, added. “Without this, it is unlikely we [would] be seeing the growing importance of sectors such as life sciences to the Irish economy.”
According to IVCA, life sciences accounted for 52pc of deals in the first quarter, with software and cybersecurity making up 19pc and 9pc respectively.