Irish tech firms raised €486m funding in first half of 2016

9 Sep 2016

Michael Murphy, chair, and Regina Breheny, director-general, Irish Venture Capital Association. Photo via John T Ohle

International investors have shown a healthy appetite for investment in Irish tech companies with global players leading the charge in helping to achieve a record €486m invested in the first half of 2016.

According to the Irish Venture Capital Association’s latest VenturePulse survey published today in association with William Fry, this is up 58pc on last year.

Last year, €306.9m was raised during the same period.

Future Human

The survey shows that Irish companies raised €249.1m from investors in the second quarter of 2016.

‘The Irish venture capital community continues to be the main source of funding for Irish innovative SMEs’

“2015, overall, was a record year with €522m being raised over the 12 months so it is promising to see the momentum continuing,” said Michael Murphy, chairman, Irish Venture Capital Association (IVCA).

“The importance of good international relationships is once again emphasised by sustained strong support from international investors.

“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.”

Murphy pointed out that international syndicates invested €89m in the second quarter bringing the total in the first half of 2016 to €205m.

This compares to investment by international syndicates of €142m in the first half of 2015.

In addition, two companies this year raised capital of €98m directly from international investors.

Life sciences were active in the second quarter with 38pc of funds raised by eight companies in this sector. Three companies in particular raised over 33pc of total funds.

Growth and expansion funding was 93pc of total funds raised.

Seed funding not growing fast enough

In terms of seed and early-stage investment, companies raised seed capital of €16.8m in the second quarter of 2016 bringing the first-half total of 2016 to €41.5m.

This is more than double the €19.4m of seed and early stage funding in the first half of 2015.

Regina Breheny, director-general of IVCA, warned that first-round seed funding, at 7pc of funds raised, continues to be low.

“However, a number of new seed funds are now up and running and we should begin to see some recovery in early stage investment.”

She added that since the onset of the credit crunch in 2008, in excess of 1,300 Irish SMEs have raised venture capital of €3bn.

“These funds were raised almost exclusively by Irish VC fund managers who, during this period, supported the creation of over 20,000 jobs, attracted over €1.3bn of capital into Ireland and geared up the State’s investment through the Seed & Venture Capital Programme by almost 16 times.”

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