 VC funding in Irish firms falls again

by Vish Gain

19 hours ago

Sarah-Jane Larkin, IVCA director general. Image: Diane Cusack

IVCA chair Denise Sidhu said that despite the fall, investment in the last three quarters has ‘held up well’ against a backdrop of global uncertainty.

Venture capital funding into Irish start-ups and small businesses has fallen by nearly half in the first quarter of 2024 compared to the same period last year, according to the Irish Venture Capital Association (IVCA).

In its quarterly VenturePulse survey published in association with William Fry today (26 May), the IVCA reports that VC funding in Irish SMEs totalled €258.5m in the first quarter of this year – a 48pc drop from the €502m figure in the first quarter of 2023.

This is consistent with the nosedive in VC funding into Irish firms in the last quarter of 2023, as reported by the organisation earlier this year. At the time, IVCA chair Denise Sidhu said that the drop of 16pc was consistent with global trends.

Now, despite a downturn in funding across the majority of deal sizes in the latest quarter, Sidhu says that seed funding showed particular resilience. Very early-stage Irish SMEs raised a total of €40m in the quarter, while funding in the €1-3m deal size sector rose by 126pc to €22.7m compared to €10m last year.

“Despite the fall, investment in the last three quarters has held up well against a backdrop of global uncertainty,” Sidhu said.

“This quarter and the same period last year each included one exceptional deal above €100m. If one excludes these two outliers, then the decrease in Irish funding is in line with global trends which saw a 20pc decline in the first quarter.”

Sidhu has previously warned about Ireland’s overreliance on funding from abroad. The latest IVCA figures show that international funding into Irish SMEs fell by 57pc in the first quarter to €184m – down from €425m last year.

Sarah-Jane Larkin, director general of the IVCA, said that state bodies such as Enterprise Ireland and the Irish Strategic Investment Fund are helping Irish companies get off the ground – but it’s not enough for scaling.

“The big challenge is our overdependence on unpredictable international investors in taking these start-ups to the next level of growth,” Larkin said.

“In this regard, we welcome Minister Michael McGrath’s recent comments on the desirability of unlocking some of the €150bn in domestic household deposits into more productive use for both the economy and for savers.”

Larkin said the IVCA will make a case for allowing Irish pension savers to invest in Irish start-ups under the planned auto enrollment scheme in its pre-Budget submission to the Government, similar to an existing scheme in France.

Top deals this quarter were: Mainstay Medical (€115m), GridBeyond (€52m), Halo Technologies (€18.4m), Mybronics (€17.5m) and Cumulus Neuroscience (€13m). Life sciences (62pc) attracted the most VC funding in the latest quarter, followed by envirotech (17pc) and software (9pc).

Find out how emerging tech trends are transforming tomorrow with our new podcast, Future Human: The Series. Listen now on Spotify, on Apple or wherever you get your podcasts.

Related: funding and investment, finance, SMEs, Ireland, Enterprise Ireland, entrepreneurs, William Fry

Vish Gain is a journalist with Silicon Republic

editorial@siliconrepublic.com

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VC funding in Irish firms falls again

Venture capital funding in Irish start-ups and small businesses has decreased by nearly half in the first quarter of 2024 compared to the same period last year, according to the Irish Venture Capital Association (IVCA). Despite this, seed funding showed resilience and international funding has held up well against global uncertainty.