Fintech deals lead Irish VC investment in Q3 2019

5 Nov 2019492 Views

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In a record year for VC investment in Europe, Irish companies raised more than $185m in 22 deals.

In a study of the $55.71bn in venture capital investment raised globally in the third quarter of 2019, the largest deals in Ireland were in the IT and financial services sectors.

According to the Venture Pulse report published by KPMG with data provided by PitchBook, $185.3m in venture capital was raised in Ireland in Q3 2019 across more than 22 deals.

‘Ireland continues to attract a significant amount of attention from VC investors and fintech remains a very hot sector’
– ANNA SCALLY

The Venture Pulse report tracks VC activity around the world, accounting for 4,154 deals in Q3 2019, down from more than 5,000 in the previous quarter. With the number of deals dropping, so too did the overall investment figure, from $64.96bn in Q2 to $55.71bn in Q3.

The largest deal closed in Ireland in this period was fintech company Fenergo’s €66m investment in July 2019, followed by Dublin-founded student loan specialist Future Finance, which raised €23m in the same month.

“Ireland continues to attract a significant amount of attention from VC investors and fintech remains a very hot sector,” said KPMG partner and fintech lead Anna Scally.

“Recent announcements by both Revolut and Starling Bank on opening international offices in Dublin is further proof of the calibre and reputation of the hub we have developed here in Ireland for fintech.”

Opportunities in climate and environment

As well as Ireland’s fintech strengths, Scally highlighted investment in Strong Roots, a vegetarian frozen foods brand that secured $18.3m from a New York private equity firm in September.

“Companies who are developing products and services to help address climate change and support the decarbonisation agenda are probably not attracting the VC dollars they should expect. I predict that over the next few quarters, we will see more investors putting their money behind early-stage companies with decarbonisation solutions. And I think public sentiment, at least in Europe, would support that,” Scally added.

At Davos 2020, KPMG is expected to launch the global Sustainable Energy Innovation Fund along with the World Economic Forum. This fund will have a blended public-private finance structure designed to support transformative solutions to the climate crisis.

Europe’s record year of VC

The Venture Pulse figures follow a report from Stripe and Tech.eu, which specifically looked at late-stage funding of European start-ups in 2019. According to this report, total late-stage investment in Europe jumped fourfold in less than three years – from €3bn in 2016 to €12bn in the first three quarters of this year – indicating that 2019 will be a major year of funding.

Indeed, the KPMG report backs this up, noting a record high of VC investment in Europe in the year so far at $28.76bn, already surpassing the 2018 total.

Looking at the global figures, cybersecurity is a key sector, reaching $5.77bn investment in the year to date and forecast to exceed 2018’s record total of $6.4bn. According the KPMG analysis, there’s no end in sight for cybersecurity investment with increasing focus across all sectors and regions alongside a rapid evolution of the threatscape.

In all, VC investment this year is expected to fall short of 2018’s record global levels but remain robust.

Elaine Burke is the editor of Siliconrepublic.com

editorial@siliconrepublic.com