Irish tech start-ups had a record-breaking 2021 with €1.6bn raised

14 Apr 2022

Image: © Valeriy Zvyagin/Stock.adobe.com

TechIreland said new records were seen in multiple sectors despite the pandemic challenges, while the health-tech space once again attracted the most funding last year.

2021 was a record-breaking year for Irish tech funding with €1.6bn raised by 292 companies, a 60pc increase in funding compared to 2020.

That’s according to the latest report from TechIreland, which showed new records being hit across Irish tech sectors in terms of the number of deals and the size of investment rounds.

Future Human

In total, 12 companies raised more than €30m last year, which is a significant increase from three companies reaching this milestone in 2019. A new record was reached with 46 companies raising between €5m and €30m.

Despite the ongoing challenges of the pandemic, 118 companies raised early-stage rounds, which TechIreland said is back to pre-Covid levels.

“2021 was a landmark year for Irish tech with records broken across all sectors and stages of growth,” TechIreland CEO John O’Dea said. “At a time of rising international tension, it is great to be the bearer of good news.”

O’Dea added that Enterprise Ireland “led the charge” with early-stage investment. The State agency revealed last week that it invested more than €28m in 125 Irish start-ups last year, which included 82 high potential start-ups. Last year, Enterprise Ireland was recognised as one of the most active investors in Europe and globally.

Enterprise Ireland banking relations manager Donnchadh Cullinan said: “The increase in investment last year across the board has shown that while the pandemic interrupted the normal start-up cycle for everyone, the fundamentals of investment still hold and, as in previous years, good projects will always attract interest from investors.”

TechIreland’s funding report for 2020 indicated that seed funding deals were drying up in Ireland. However, this sector seems to be making a comeback as the number of companies raising up to €1m increased by 10pc last year.

A number of new funds have been launched recently aimed at boosting early-stage Irish start-ups. In February, the Government launched a €90m Irish Innovation Seed Fund, managed by the European Investment Fund and structured on a fund-of-funds basis led by Enterprise Ireland.

Last week, Dublin-based venture capital firm Delta Partners announced a new fund with a target close of €70m to back 30 early-stage technology businesses in Ireland, and Elkstone also launched a €100m fund to take Irish start-ups in the seed and pre-Series A stages to the next level.

Bank of Ireland head of technology Paul Swift said funds like these “will provide a level of certainty in terms of potential access to capital for the pipeline of Irish high-growth tech companies”.

Health-tech tops the charts

Similar to previous years, the health-tech sector attracted the most funding in Ireland – 74 companies raised €623m last year, a 50pc increase from 2020. The medical device subsector saw massive growth as 22 companies raised €264m, which is an increase of 265pc.

Enterprise solutions came second in terms of investment value but saw the largest number of investment rounds, as 84 companies raised €363m.

Fintech was next with 29 companies raising €265m, up from €186m the previous year. The big investments in this sector were Carne Group’s €100m investment from Vitruvian Partners and Wayflyer’s $76m Series A funding round.

E-commerce saw a sharp funding increase as 36 companies raised €100m last year, up from 14 companies raising €33m the previous year.

The SaaS sector continues to grow rapidly, raising €315m last year among 44 companies. This represents a 60pc increase on 2020, which was 67pc higher than the previous year. Companies focused on AI hit a new record with €171m raised.

However, big data, IoT and AR/VR sectors all saw a decline in funding. The AR and VR sector went from €45m in funding in 2020 to only €3.5m last year.

The 10 largest investments accounted for half of the overall funding raised last year, with the top three deals all in the health-tech sector. These were Mainstay Medical raising €131m, LetsGetChecked’s $150m funding round and GH Research’s $125m fundraise.

Women-founded tech start-ups also saw a large boost, as 55 companies led by women raised €230m last year. This is a dramatic increase from 2020, when investment into women-founded companies reached a record €105m. However, this amount is still only 13pc of the total amount raised last year.

Similar to previous reports, a regional imbalance in investment was apparent with Dublin taking more than 75pc of the total funding last year. The biggest win outside of Dublin was Cork-based Teamwork, which raised $70m in its first funding round.

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Leigh Mc Gowran is a journalist with Silicon Republic

editorial@siliconrepublic.com