Irish technology companies raised €52m in funding in the first quarter of 2013, new figures released today by the Irish Venture Capital Association (IVCA) suggest. It warned, however, that there could be a potential shortage of seed capital down the line.
Based on the VenturePulse survey, Irish companies raised €52.1m from investors in the first quarter of 2013. This is in line with €52.2m worth of funds raised during the same period last year.
Dr Manus Rogan, chairman, IVCA, said this was a "highly satisfactory" performance, especially as activity in international markets is experiencing volatility.
"For example, US quarter numbers are down 6pc, as the global credit crunch continues to bite," he said.
Early stage companies raised seed capital to the value of €7.3m in Q1 2013. This compares with €13.3m of funds raised by early stage firms in Q1 2012.
The report found that first-round funding from January to March of this year was 14pc of funds raised compared to 20pc in 2012. Stephen Keogh, a corporate partner in William Fry, which acted as legal adviser in more than half of the funding rounds in the first quarter, said the data could be an early warning sign.
"Seed funds supported by the banking sector and Enterprise Ireland’s seed and venture capital programme of 2006-2012 will be fully invested in the near term. These funds will need to be renewed if entrepreneurs are to be supported as actively as in the last five years," he said.
The IVCA’s director-general Regina Breheny said the venture capital (VC) community continues to be the main source of funding for Irish SMEs both through direct investment and as the local lead investor for international syndicate investors.
She said that since the onset of the credit crunch in 2008, 764 Irish SMEs raised venture capital of €1.5bn. According to Breheny, these funds were raised almost exclusively by Irish VC fund managers who, during this period, supported the creation of up to 20,000 jobs and attracted more than €450m of capital into Ireland. She said these VC fund managers geared up the State’s investment through the seed and venture capital programme by almost seven times.
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