Irish tech firms raise record €888m thanks to life sciences sector

15 Feb 2017

Image: Matej Kastelic/Shutterstock

The life sciences sector in Ireland is buoying the native tech industry.

A new survey has found that a record €888m was raised by Irish SME firms in 2016, largely due to the booming life sciences sector.

The news comes as the Irish Venture Capital Association (IVCA), in partnership with William Fry, compiled a report charting the past six years of venture capital funding for tech start-ups in Ireland.

During that time, the report found that the number of companies that raised funds has risen from 159 to 221.

From €274m to €888m

The number of companies raising more than €25m also experienced a significant boost, trebling from more than €274m in 2011, to the new record of €888.1m in 2016.

2016 saw a monumental leap in the amount of funding for tech start-ups in Ireland; in 2015, €522.1m was raised, marking a 70pc increase for last year.

Within that, institutional VC is the predominant provider of capital, having grown from 60pc in 2011 to 85pc in 2016.

Meanwhile, Ireland’s attractiveness as a place to invest has also grown significantly in recent years.

Eightfold increase in international investment

According to the IVCA’s figures, funds raised from international investors increased eightfold, from €65m in 2011 to €548m in 2016, or 62pc of the total funds raised.

The focus of this investment has also shifted from seed funding for start-ups to funding for expansion, with the latter making up more than half of all VC funding last year.

The report found by a considerable margin that that the life sciences sector received the largest amount of funding for 2016. Of the total €888.1m raised last year, €465.1m was invested in the life sciences sector.

Software companies came in second, raising a total of €157.8m.

11 companies made up 38pc of funding

Within the life sciences sector, the biggest winner by some margin was the oncology start-up Carrick Therapeutics, which raised a total of €85m from investors in October last year.

This company and 10 others accounted for more than 38pc of the total funds raised by life sciences start-ups in Ireland.

Despite the sector’s dominance, the IVCA believes fintech still has a big future to play for future investment, with €117m raised by start-ups this year.

IVCA chairperson Michael Murphy said: “This performance is particularly significant as venture capital activity in the US declined by 13pc in 2016, and in the UK by 4pc.”

Colm Gorey was a senior journalist with Silicon Republic