Overseas investors helped Irish venture capital investments grow 30pc in 2015

3 Feb 2016

International investors accounted for a bigger proportion of investment in Irish firms. 18pc of the funds raised in 2015 went to Irish firms who went abroad, mostly to Silicon Valley

International investors have a growing appetite for Irish tech firms, according to the Irish Venture Capital Association, which reported venture capital investment in Irish firms soared 30pc to €522m in 2015.

International investors invested €241m (46pc of total funds raised) in Irish firms in 2015 compared to €132m (33pc of total funds raised) in 2014. This source of funds has grown from €45.5m (17pc of total funds raised) in 2011 over the five-year period.

The chairman of the IVCA, Brian Caulfield, emphasised the importance of strong relationships with international venture capital players.

“The results show increased interest by overseas investors in the Irish tech sector, which is a tribute to the calibre of its entrepreneurs and technology capabilities,” Caulfield said.

“The Irish venture capital community continues to be the main source of funding for Irish innovative SMEs, both through direct investment and as the local lead investor for international syndicate investors.”

If you’re going to San Francisco…

According to the IVCA VenturePulse survey, 18pc of 2015’s total fundraising was raised by eight Irish companies that went directly abroad, mainly to Silicon Valley, compared to 13pc in 2014.

“This is a growing phenomenon and further validation of the calibre of the Irish technology sector,” said Regina Breheny, director general of the IVCA.

She added that the 30pc increase in funding overall was significant in view of the fact that most Irish venture capital companies have been in the middle of fundraising programmes.

Seed funding looks like it is very close to bottoming out as existing seed funds need to be renewed.

Only 8pc of funding allocated during 2015 went into seed capital.

Breheny said that since the onset of the credit crunch in 2008, more than 1,200 Irish SMEs raised venture capital of €2.6bn.

These funds were raised almost exclusively by Irish VC fund managers who, during this period, supported the creation of up to 20,000 jobs; attracted more than €1.1bn of capital into Ireland and leveraged the State’s investment through the Seed & Venture Capital Programme by almost seven times.

Venture capital euros image via Shutterstock

John Kennedy is a journalist who served as editor of Silicon Republic for 17 years