Elaine Smyth and Kieran Dalton, Catalyst; and Pauline Timoney, COO of Automated Intelligence, one of the NI companies that raised investment in 2022. Image: Catalyst
Northern Ireland tech companies are performing well in terms of investment say Catalyst, but another recent report said women founders are not enjoying huge funding success.
Venture capital investment in Northern Ireland has tripled in the last three years, with investments in the region’s tech companies reaching £139m in 2022. The money was spread across 89 businesses.
That’s according to a report by Catalyst. The tech and innovation-focused organisation helps Northern Ireland founders to scale their businesses.
Last November, it teamed up with Techstart Ventures to provide grant supports to Northern Ireland start-ups as part of its annual Co-Founders entrepreneurship programme.
Catalyst has been tracking innovation investment in Northern Ireland since 2017, reviewing each investment to ensure the accuracy of reporting for Northern Ireland. The data it has been collecting informs the Catalyst Deal Tracker, which was launched today (14 March). There will be a complete report published next month.
Jumps in deal value
The organisation found that the significant jump in deal value this year reflects an increase in the number of established Northern Ireland companies that have turned to venture capital investment to support their growth plans.
The level of investment that Catalyst observed in 2022 represented a 29pc rise in the value of transactions compared to the previous year. In 2021, £107m was invested across 68 deals.
The 2022 figure is more than triple the £44.3m figure from 2019.
The average amount invested in each deal was £1.6m, an increase of £100,000 on the average funding round recorded in 2021. Catalyst’s research also noted that there were 20 deals in the £1m to £5m range, 10 investments with a value of more than £5m, and 5 deals worth more than £10m.
Around £40m of the money invested was from Northern Ireland sources. However, the majority invested (71pc) of the total sum invested came from parties based outside of Northern Ireland.
Some of the big names that invested in Northern Ireland companies included Google Ventures, Barclays, Clean Growth Fund, ExSight Ventures, Visionary Ventures and SignalFire.
Uncertainty in the wider market
The news that 2022 was a record year for the region comes at a time when many start-ups around the world are feeling uncertain due to the collapse of Silicon Valley Bank.
Kieran Dalton, head of scaling at Catalyst, pointed out that 2022 had been a challenging year for VC investment in the wider UK market.
“In light of a fall in venture capital investment in the UK market overall, the increase in venture capital investment into Northern Ireland companies is very welcome,” he said.
“When we analyse the underlying data, we can see the cause of this increase has been the emergence of a cluster of growth companies which are redefining the aspirations for innovation companies within Northern Ireland.”
Steve Orr, CEO of Catalyst, said that “These figures show that Northern Ireland companies continue to attract increasing amounts of international investment, even at a time when venture capital activity globally has fallen.”
“Given the slowdown and ongoing pressures facing the venture capital market, which have been exacerbated in recent days by the uncertainty created by the rescue of the sector’s major banking player, Silicon Valley Bank, it will become increasingly important for local start-ups that global investors are aware this is a region and an economy that has a strong track record of producing innovative companies with high growth potential.”
Mixed fortunes for minorities in VC
Another recent report on start-up funding for women founders by TechIreland found that Northern Ireland’s VC scene performed relatively poorly in terms of diversity.
The report found that while 2022 was an excellent year for women founders in Ireland as a whole, Northern Ireland women founders only netted €4m (approx. £3.5m) in total.
Some VCs are aiming specifically to support underrepresented founders in the region, however. One of these firms, London-based Ada Ventures, today (14 March) launched a programme that backs 20 angel investors from minority backgrounds across the UK.
To date, Ada Ventures has invested in 28 companies. It selects its angel investors via a blind selection process to avoid bias.
Some of the angels that were selected as part of its latest cohort include Izzy Obeng, a Forbes 30 under 30 awardee; and Elizabeth Glenfield, a Belfast-based product leader working with low-code start-up Budibase.
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