Irish venture capital in Q3 reaches €415m – but seed funding dangerously low

6 Nov 201538 Shares

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Regina Breheny, director general, Irish Venture Capital Association

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Venture capital funding in Ireland in the first nine months of 2015 reached €415m, up by a third on the same time last year. However, seed funding was only 6pc of this activity.

“This activity already exceeds total funds of €401m raised in the full year of 2014, which is a terrific result, considering the industry in Ireland is currently in fundraising mode,” commented Brian Caulfield, chairman of the Irish Venture Capital Association (IVCA).

The IVCA VenturePulse survey shows that Irish companies raised €108.2m from investors in Q3 2015. Funds raised in the nine months to end September 2015 reached a high of €415.1m. This compares with funds raised of €314.4m in the same period of 2014, to €232.6m in 2013 and to €184.8m in 2012, an increase of 126pc in the three-year period.

‘The seed funds supported by the banking sector and EI’s Seed & Venture Capital programme of 2006-2012 are close to being fully invested’
– REGINA BREHENY

Total seed funds raised in Q3 2015 was €6m — 6pc of total funds raised.

Seed funds raised in the nine months to end September 2015 reached €25.5m (6pc of total funds raised). This compares with seed funds raised of €17m (5pc of total funds raised) in the same period of 2014, to €48.5m (21pc of total funds raised) in 2013 and to €34.2m (18.6pc of total funds raised) in 2012.

Regina Breheny, director general of the IVCA commented that, with continued strong support from international players, growth/expansion funding was 94pc of total funds raised.

“The Irish venture capital community continues to be the main source of funding for Irish innovative SMEs both through direct investment and as the local lead investor for international syndicate investors who invested €83m in quarter three or €225m in nine months to end September 2015.

“There continues to be an encouraging international investor appetite for Irish tech firms, although these investors usually require the reassurance of local venture capital involvement.”

A poor harvest in terms of seed funding

However, she cautioned that first round seed funding at 6pc of funds raised remains low.

“The seed funds supported by the banking sector and EI’s Seed & Venture Capital programme of 2006-2012 are close to being fully invested. These funds need to be renewed if entrepreneurs are to be supported as actively as in the last five years and we believe that new funds will come on stream in the first quarter of 2016.”

She pointed out that since the onset of the credit crunch in 2008, in excess of 1,000 Irish SMEs raised venture capital of €2.4bn.

“These funds were raised almost exclusively by Irish venture capital fund managers who during this period supported the creation of up to 20,000 jobs; attracted over €900m of capital into Ireland and geared up the State’s investment through the Seed & Venture Capital Programme by almost seven times.”

Editor John Kennedy is an award-winning technology journalist.

editorial@siliconrepublic.com