Irish tech start-ups raised record €932m in first half of 2021

27 Sep 2021

Image: © Ahmed Salah/Stock.adobe.com

While investment in Irish tech is on the rise, TechIreland highlighted a concerning regional imbalance in funding and a need for greater early-stage support.

More than 100 Irish tech start-ups together raised a record €932m in the first half of this year from venture capital, debt finance, grants and crowdfunding.

That’s according to the latest Startup Funding Review from TechIreland, which highlighted that the headline figure is dominated by large, late-stage deals.

The top five investments recorded in the report accounted for half of the total funding raised. This included LetsGetChecked’s €150m funding round, GH Research’s $125m fundraise and Carne Group’s €100m investment.

‘As always, the headline figures conceal some less-welcome trends’
– BRIAN CAULFIELD

Echoing a recent report from the Irish Venture Capital Association, TechIreland found that early-stage investment rounds fell sharply in the second quarter after a strong start to the year.

Overall however, there was an increase in the number of early-stage rounds in the first six months of 2021, with 35 companies raising between €1m and €5m, up from 26 in the same period last year.

“The big increase in funding came from late-stage deals,” said Brian Caulfield, venture partner at Draper Esprit and chair of Scale Ireland.

“Early-stage [deals] saw much more modest increases. As always, the headline figures conceal some less-welcome trends.”

Elaine Coughlan, managing partner at Atlantic Bridge, added that while venture financing got off to a “barnstorming” start in Ireland in 2021, “we need to ensure that early-stage companies get access to more of the investment they need”.

Highs and lows

The health-tech sector accounted for nearly half of the total funding, with 27 companies raising €439m in the first six months of the year. This included a significant funding round for Dublin-based Mainstay Medical and a $25m raise for Galway’s Neurent Medical.

Another key sector was fintech. Big deals in this area during the first half of the year included the acquisitions of Fenergo and Taxamo.

Enterprise tech, SaaS and medical devices were other areas that attracted investment, however there was a decline in funding for travel-tech, clean-tech and AI businesses.

Aside from late-stage deals dominating the figures, TechIreland highlighted a number of other concerns in its report.

This included a regional imbalance in funding, with Dublin companies taking 82pc of the total figure. While investment outside the capital declined compared to the same period last year, there were some big winners such as Wexford’s Scurri.

Additionally, funding for companies with female founders declined from 11pc of the total to just 6pc.

Enterprise Ireland was highlighted as a key backer when it comes to pre-seed and seed funding. The State agency is one of the most active investors in Europe and globally, pumping €48m into Irish start-ups last year.

“The first half of 2021 has seen plenty of entrepreneurial resilience in what remains a difficult market,” said Niall McEvoy, manager for high-potential start-ups at Enterprise Ireland.

“Exciting new opportunities have emerged in cybersecurity, privacy, big data and digital health. The overriding theme has been the digitisation of business via SaaS models.”

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Sarah Harford is sub-editor of Silicon Republic

editorial@siliconrepublic.com