Without the mega deals, Irish venture funding fell 41pc in Q1 2019

23 May 2019125 Views

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Perhaps a more realistic picture is emerging around venture funding in Ireland?

Venture capital funding in Ireland fell 41pc year on year to €197m in the first quarter, according to new figures from the Irish Venture Capital Association (IVCA) and William Fry.

However, last year’s Q1 figures were buoyed up or distorted by bigger-than-average funding rounds achieved by both Intercom (€101m) and AMCS (€100m).

‘Despite the overall fall in funding, the Irish venture capital community continues to be the main source of investment for Irish innovative SMEs’
– SARAH-JANE LARKIN

If you stripped those deals away, the IVCA argues, then regular funding levels are showing signs of growth and a more normalised picture is emerging.

“Last year included two mega deals of €100m each for Intercom and AMCS. If you strip these out, then core growth across all deals in the first quarter was almost 50pc,” said IVCA chair Alex Hobbs.

Hobbs said that activity in the market is reflected in the fact that 75 Irish companies received start-up or follow-on funding compared to 43 in the same quarter last year.

Seed funding rebound

Sarah-Jane Larkin, director general of the IVCA, said that there was a strong rebound in seed funding to early-stage firms, up 23pc to €17.8m.

She added that there was also an increase in the number of smaller deal sizes in the €1m to €5m category, which increased from 36 to 66 compared to the same quarter last year.

Life sciences and software dominated the overall figures, with 47pc and 33pc of funds raised respectively. All five investments that exceeded €10m were in the life sciences sector. AI and machine learning received 3pc.

“Despite the overall fall in funding, the Irish venture capital community continues to be the main source of investment for Irish innovative SMEs, both through direct investment and as the local lead investor for international syndicate investors who invested €112m or 57pc of total funds raised in the first quarter [of] 2019,” Larkin said.

John Kennedy is an award-winning technology journalist who served as editor of Siliconrepublic.com for 17 years.

editorial@siliconrepublic.com