Irish tech firms raised close to €1bn in venture capital in 2017

14 Mar 2018474 Views

Share on FacebookTweet about this on TwitterShare on LinkedInShare on Google+Pin on PinterestShare on RedditEmail this to someone

IVCA director general Sarah-Jane Larkin. Image: Chris Bellew/Fennell Photography

Share on FacebookTweet about this on TwitterShare on LinkedInShare on Google+Pin on PinterestShare on RedditEmail this to someone

Despite record year, IVCA warns that growth is slowing in terms of funding levels, and complacency must not be allowed to set in.

Irish technology companies raised €994m in venture capital funding in 2017, up 12pc on last year.

However, the Irish Venture Capital Association (IVCA) warned that there is no time for resting upon laurels.

‘It is important to recognise the role of Irish-based venture capital firms, both through direct investment and as the local lead investor for international syndicate investors’
– SARAH-JANE LARKIN

“While 2017 was a record year, it is worth noting that the year-on-year growth rate of 12pc compares to a 70pc growth rate in 2016, so there is no room for complacency,” commented Peter Sandys, chair of the IVCA.

“With continuing uncertainties over the impact on Ireland of Brexit, lower US corporation tax rates and possible US trade wars, it is more important than ever that we continue to build an indigenous knowledge-based economy.”

The latest VenturePulse survey from the IVCA, published in association with William Fry, found that technology-based companies in Ireland raised €177m in the fourth quarter of 2017.

This was up from €154m in the same period in 2016.

Growth/expansion funding contributed to 85pc of total funds raised.

Growing rate of investments underpinned by AI and analytics

IVCA director general Sarah-Jane Larkin pointed out that for the full year of 2017, the amount of seed/early-stage funding grew.

“It is noteworthy that seed/early-stage grew significantly, reaching a high of €131m for the year, up from €70.2m in 2016.”

Larkin pointed out that international investors accounted for 63pc of the funding raised by Irish SMEs in 2017.

“It is important to recognise the role of Irish-based venture capital firms, both through direct investment and as the local lead investor for international syndicate investors.

“International VCs are often encouraged by the due-diligence implications of early-stage funding by a local VC.”

Larkin said that the sectoral spread of investments in 2017 reflects Ireland’s growing tech capability, with clusters such as the medical device sector in Galway developing.

Venture capital investment in 2017 was concentrated on software (28pc), life sciences (23pc) and fintech (18pc), with many innovations underpinned by artificial intelligence (AI) and analytics.

She added that since the onset of the credit crunch in 2008, in excess of 1,400 Irish SMEs have raised venture capital of €4.5bn.

“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 over €2bn of capital into Ireland and geared up the State’s investment through the Seed and Venture Capital Programme by almost 16 times.”

Editor John Kennedy is an award-winning technology journalist.

editorial@siliconrepublic.com