Irish start-up investment falls 6pc as Europe lags behind superpowers

13 May 2019

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A new report has shown that while funding in European tech start-ups has almost doubled in three years, Ireland is lagging behind.

European start-ups overall appear to be doing pretty well for themselves according to a new report published today (13 May) by and Stripe. The ‘Life is Growth’ report analysed growth-stage tech funding across the continent from 2016 to 2019.

It showed that investment in growth-stage tech firms has nearly doubled compared with 2016, rising from €6.88bn to more than €11.66bn in 2018. Between these two years, €30bn was invested into companies across more than 2,300 funding rounds.

Leading the pack were UK firms with almost €3.4bn raised in 2018, €1bn more than France and €1.4bn more than Germany. However, news has not been as impressive for Ireland, whose start-ups raised a total of €265m for 2018.

This amounts to a drop in funding of almost 6pc, compared with France and Germany, which grew by roughly 27pc and 26pc respectively. On a more positive note, Ireland’s median deal size between 2016 and 2018 was €23m for fintech – the largest figure on the continent – as well €11m for medtech and €5m for SaaS.

Maturation was particularly apparent in the UK, Germany, France and Sweden, where scale-ups raised the bulk of growth funding, totalling €21bn out of the €30bn total in 2018.

Across the sectors, fintech led the charge in growth-stage investment followed by medtech/healthtech, SaaS and transportation. So far in Q1 2019, medtech currently makes up the bulk of funding, followed at a distance by fintech and SaaS.

 ‘European hubs lag behind’

However, Europe still pales in comparison to the US and China when it comes to growth-stage funding. The US leads with $255bn in total financing from 2015 to 2018, followed by China with $123bn and the aggregate of European countries at roughly $66bn during that time period.

Guillaume Princen, head of continental Europe at Stripe, said that the continent is being propped up somewhat by a small number of more successful nations.

“Seed investment is strong and growth investment is getting stronger, year after year. But while the UK, France, Germany and Sweden are frequently seeing the birth of globally competitive tech companies, the rest of European hubs lag behind,” he said.

Some of the companies highlighted as leading Europe’s funding include fintech start-ups such as Monzo (UK) and N26 (Germany). In medtech, start-ups such as PushDoctor (UK), Kry (Sweden) and Doctolib (France) have benefited most from the influx of growth-stage investment. They have each received €5.38bn and €4.22bn in investment respectively over the last three years.

Colm Gorey was a senior journalist with Silicon Republic