VC funding into Irish SMEs rises to record €502m in Q1 2023

28 May 2023

Leo Hamill, chairperson, Irish Venture Capital Association. Image: Fennell Photography.

The VC funding climate for Irish SMEs above €3m looks healthy, but there’s less positive news for start-ups seeking seed or early-stage funding.

Venture capital (VC) funding into Irish SMEs rose by a third (32pc) in the first quarter of 2023, according to the Irish Venture Capital Association (IVCA) VenturePulse survey.

The survey, which was published in association with William Fry, shows that VC funding grew to a record €502m, while it stood at €380m during the same period last year.

The enviro-tech sector accounted for the largest percentage of investment with 66pc, thanks to a massive €300m deal by Cork-headquartered energy company Amarenco in March.

Life sciences accounted for 11pc of investment thanks to a €27.3m deal by Dublin-based medtech Fire1, while fintech and cybersecurity accounted for 5pc and 2pc respectively. The remaining 16pc was spread across sectors such as consumer goods, sports, marine sciences and nanotechnology, to name a few.

Other big deals included enviro-tech Supernode with €16m, as well as fintech AssureHedge and enviro-tech Astatine both securing €15m.

Speaking on the record numbers, IVCA chairperson Leo Hamill described the quarter as “robust” for Ireland when compared to the drop of 53pc in global VC funding during the first three months of the year.

“While Amarenco boosted the figures, if you exclude deals above €30m in the first quarters of 2023 and 2022, this year still saw a rise of 70pc to more than €200m for the first three months, which reflects well in view of global headwinds across the sector.”

Sarah-Jane Larkin, director general of IVCA, added that investment by international VC companies into Ireland represented 40pc of the total amount in the first quarter. According to the report, excluding larger rounds above €30m, international funding is up 210pc compared on the same period last year.

“In the context of a global slowdown in VC investment, the high level of international funding secured by Irish companies clearly demonstrates a strong appetite for innovative indigenous enterprises which reflects their high quality and realistic valuations,” Larkin said.

Larkin also added that 21 indigenous companies raised between €5m and €30m during this quarter.

However, it’s not all good news, especially for start-ups looking for seed or early-stage funding.

While deals above the €3m margin performed well, the value of deals in the range of €1m to €3m fell by 67pc to €10m, while the value of deals under €1m fell by 28pc.

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Colin Ryan is a copywriter/copyeditor at Silicon Republic