The managers of the Invest NI-backed Co-Fund NI said that equity investors are taking notice of the region’s potential and investing more than before.
Start-ups and early-stage companies in Northern Ireland are seeing higher levels of investment compared to previous years despite the negative economic impact of the Covid-19 pandemic.
Co-Fund NI, a fund for Northern Irish start-ups backed by government agency Invest NI, saw its portfolio companies raise £56m in investment in the year ending 31 March 2021. Of those companies, 15 raised on average £2.9m in Series A funding rounds – almost double the average value of Series A rounds in the previous year.
Clarendon Fund Managers, who manage the £47.3m Co-Fund NI, said that the fund invested £7.5m in Northern Irish businesses in this period. This was alongside an additional £13.2m in private investments across 37 funding rounds, brining total investments to more than £31m.
When private match investment and leveraged funds are included, the overall investment made in the period stands at £174m.
“Demand for funding is high and the quality of the companies we are seeing coming through is increasing every year,” said Brian Cummings, investment director at Clarendon Fund Managers.
“It’s clear from some of the Series A funding rounds raised by Northern Ireland companies in our last financial year that a number of equity investors are starting to take notice of the potential in the region.”
He added that NI start-ups could raise even higher amounts if more external investors were aware of the quality of companies emerging from the region.
“But I would encourage others who aren’t already doing so to take a look at what’s emerging in Northern Ireland as we’d like to invest alongside more external investors,” Cummings said.
Tech and life sciences lead the way
Some of the Series A star-performers include Cumulus Neuroscience, which raised £6m from DDF and Life Arc Science Fund; Neurovalens, which raised more than £5m from IQ Capital and Wharton; and Cirdan Imaging which raised £3.6m from existing shareholders and the Future Fund.
Biometric security start-up B-Secur has raised almost £8m in the first of half of the year, including $6m from a US-based fund. Its CEO Alan Foreman said his company was first funded by Co-Fund NI in early 2020, which was an uncertain time for B-Secur’s business. It has since invested twice more in the company.
“I was thrilled that B-Secur was able to find a Northern Ireland investor that understands our deep-tech proposition and the immense global opportunity we have, while supporting our growth ambitions locally. Co-Fund NI’s support since early 2020 provided a key endorsement as we sought investment from the US, a key strategic market for the company.”
Tech and ICT companies attracted more than a third (34pc) of funds invested by Co-Fund NI, followed closely by life and health science companies at 31pc. Some of the other sectors that attracted investment included creative and digital firms at 14pc, advanced manufacturing at 11pc, and food, tourism and consumer goods at 10pc.
Co-Fund NI’s increased investment activity led to a £16m government-backed top-up from Invest NI and British Business Investments.