Irish tech raised a record €963m in VC funding in the first half of 2023

10 Sep 2023

IVCA chair Denise Sidhu. Image: Fennell Photography

However, more than 80pc of the total VC investment in Ireland for the first half of this year came from foreign investors, the IVCA has found.

Irish tech companies raised more than €963m in VC funding in the first half of this year, according to data released by the Irish Venture Capital Association (IVCA).

The record amount represents a 24pc increase over the €778m raised in the first half of 2022.

Denise Sidhu, who was recently appointed as IVCA chair, said that the VenturePulse survey results published today (11 September) indicate that Ireland “well outperformed global trends” as global VC investment saw significant downturns.

“Ireland only broke the €1bn threshold for a full year for the first time in 2021, yet we are close to that in 2023 for the half year,” she said.

However, Ireland’s strong performance was spearheaded by deals valued at more than €30m. For those below that threshold, Sidhu said that VC investment fell by more than half in the second quarter and by 16pc for the half year.

Perhaps more worrying is that international investors accounted for more than 80pc of total VC investment in Ireland in the first half of the year. This figure was at 58pc for the same period last year, indicating that Ireland’s dependence on foreign investment is on the rise.

“As in the case of foreign direct investment, there is a high risk of over dependence on mobile international capital. We need to put in place alternative sources locally,” Sidhu explained.

“The global interest in our best companies shows that we have the technology and talent to create world-beaters. The only reason holding us back from creating more tech equivalents of domestic global success stories like Kerrygold or Ryanair is lack of scaling finance.”

Unsurprisingly, AI has risen to become one of the top three sectors attracting investment, bringing in a total of €83m – 9pc of total funding raised. Climate-tech or clean energy lead the way, raising 57pc of total investment, followed by life sciences at 10pc.

“Last year, corporates in the United States accounted for 52pc of total venture capital investment,” said Sarah-Jane Larkin, director general of the IVCA.

“We should be tapping into our success in attracting the world’s largest multinationals by incentivising them to invest in innovative Irish companies.”

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Vish Gain is a journalist with Silicon Republic