Seed funding in Ireland gets €10m boost from Government

16 Sep 2020

Image: © allexxandarx/

Venture capital firms are invited to apply to the expanded Seed and Venture Capital Scheme from Enterprise Ireland to support early-stage businesses.

Additional funding is now available to support seed investment in Ireland, particularly for early-stage start-ups impacted by Covid-19.

The Enterprise Ireland Seed and Venture Capital Scheme has an added €10m available for venture capital firms to invest in portfolio companies hit hardest by the pandemic. Applications to the fund will be evaluated based on the most critical needs.

The boost to the scheme, which originally had €175m available to support the funding requirements of innovative early-stage Irish companies, comes following a commitment made in the July stimulus package.

The Government’s objective of preparing the Irish economy for the future included a commitment to increase seed and venture capital funding “for innovation-driving enterprises”. The July stimulus also promised a €25m investment in life sciences, €10m for a New Green Enterprise Fund and additional supports for businesses to develop their online presence.

Last month, Minister of State for Business, Employment and Retail Damien English, TD, announced the launch of a new €5.5m Covid-19 Online Retail Scheme. Under this scheme, retailers can apply for grants of between €10,000 and €40,000 to fund the development of digital strategies and boost e-commerce offerings.

‘The economic impact of Covid-19 sets new challenges for venture-backed companies and investors in the early and growth-stage funding markets’

While VC investment in Ireland hit a record high during the pandemic, seed financing saw a dramatic drop.

Overall funding for start-ups in Ireland rose to €363.8m in the second quarter of 2020 – a 58pc year-on-year increase – according to the latest Venture Pulse Survey from the Irish Venture Capital Association (IVCA) and William Fry. However, first-time funding during the same period fell by 60pc, with only a handful of start-ups raising their first equity rounds.

Sarah-Jane Larkin, director-general of IVCA, raised concerns over this collapse in seed funding and the association’s pre-Budget submission is expected to make recommendations on how to enable an innovation-driven economic recovery. This includes “attracting new private investors in start-ups through increased tax relief for high-risk, early-stage firms”, said Larkin.

The shortage of funding for early-stage start-ups was also highlighted in a recent Tech Ireland report looking at start-up funding in the first half of the year. Draper Esprit venture partner Brian Caulfield warned: “In this environment, strong Government intervention to ensure capital is available in the market is essential.”

Leo McAdams, investment services lead at Enterprise Ireland, agreed that it has been a uniquely challenging period for early-stage investment. “The funding environment for innovative Irish companies in Ireland in the first half of the year has been robust. However, the economic impact of Covid-19 sets new challenges for venture-backed companies and investors in the early and growth-stage funding markets.”

He added that the new €10m tranche of funding under the Seed and Venture Capital Scheme will help early-stage companies meet these challenges. Applications are now open for funds that have additional short-term needs. A second call for medium-term needs will be announced in 2021.

Later this year, the Government will also set out a National Economic Plan, which will be the roadmap for a long-term jobs-led recovery.

Additional reporting by Kelly Earley

Elaine Burke is the host of For Tech’s Sake, a co-production from Silicon Republic and The HeadStuff Podcast Network. She was previously the editor of Silicon Republic.