Irish medtech has been boosted by west-focused fund

15 Aug 2022

Western Development Commission CEO Tomás Ó Síocháin; Minister for Rural and Community Development Heather Humphreys, TD; and Western Investment Fund manager Gillian Buckley. Image: Western Development Commission

More than 35pc of the Western Investment Fund has gone to medtech start-ups, with 38 projects supported between 2001 and 2020.

A fund dedicated to growing companies in the west of Ireland has pumped the majority of its resources into the medtech and life sciences sector over the past two decades.

The Western Investment Fund (WIF) was set up in 2001 by the Western Development Commission (WDC). It provides seed, venture capital and loan finance to companies and community projects across Donegal, Sligo, Leitrim, Roscommon, Mayo, Galway and Clare.

A report by economic consultancy firm Indecon has now found that more than half of the WIF was allocated to the medtech and tech sectors combined between 2001 and 2020.

The report was based on survey responses from participating companies and fund data analysed during the period.

The medtech and life sciences sector received the largest amount of funding from the WIF at €21.6m. This amounted to 35.3pc of the total funding disbursed and went to 38 medtech projects.

Businesses from the tech sector received €12.8m, which amounted to 20.8pc of the total funding. A total of 25 tech projects were funded by the WIF between 2001 to 2020.

‘The remarkable success of the fund over 20 years is to have changed the culture around investment in the region, to help develop key sectors like medtech’

WIF began in 2001 with the aim of investing public money in businesses in the west of Ireland. It co-invests with private sector investors on a commercial basis, and all returns are reinvested back into the region.

The fund started with €31m and is now worth €73m. It has been self-financing since 2010.

Some of the start-ups it has invested in over the years include Galway medtech Tympany Medical, Sligo biotech Nektr, Galway medtech Neurent Medical, and Future Mobility Campus Ireland.

Overall, Indecon found that the WIF has provided “an impressive contribution to economic activity in the western region and has made a significant contribution to the national economy”.

The contribution of companies supported by the fund to Ireland’s economy since 2001 is estimated by Indecon to be almost €3.3bn.

From 2001 to 2020, more than €61m was invested or lent by the fund to 217 unique entities including SMEs, community or social enterprises, creative projects and strategic initiatives.

The report found that almost 5,300 jobs are supported by fund-backed companies or enterprises when economy-wide impacts are considered.

The vast majority (96pc) of the companies surveyed by Indecon indicated that securing funding from WIF was either very significant or significant for their organisation.

“The WDC Investment Fund was established at a time when there was little investment money available to business to help them expand,” Tomás Ó Síocháin, CEO of the WDC.

“The remarkable success of the fund over 20 years is to have changed the culture around investment in the region, to help develop key sectors like medtech and, in doing so, to use the profit on investments to reinvest in new business and to lend to communities across the region.”

The west of Ireland has become known as a medtech hub, and Indecon highlighted the role played by the WIF in helping the regional medtech sector, in particular, to grow. It estimated that 1,083 people are employed by medtech companies that received WIF funding.

Stakeholders with detailed knowledge of the sector noted that medical device start-ups differ significantly from start-ups in ICT, media, food and agri business in that they require much higher seed financing. This is in order to attract key medical opinion leaders to their scientific boards.

The stakeholders noted that without the WDC fund, many start-ups would struggle to attract other investors such as Enterprise Ireland or angel investors.

“It is important to consider the potential for the investment in the medtech sector to act as a blueprint for how to grow a sector and cluster of firms in other industries, such as fintech, cleantech, AI, big data and analytics and advanced manufacturing and robotics, which have been identified by the WDC as important strategic areas,” the report said.

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Blathnaid O’Dea is Careers reporter at Silicon Republic