Irish SME venture capital investments fall more than half in first quarter

IVCA hopeful local policy initiatives will offset impact of Middle East conflict

Trade

Caroline Gaynor, Irish Venture Capital Association

Irish technology SMEs raised €221.7 million in venture capital in the first quarter of 2026, a fall of 58% compared to the same period last year, according to the Irish Venture Capital Association VenturePulse survey published today in association with William Fry.

International investors accounted for 85% of the capital raised during the quarter. AI accounted for about 80% of the record $300 billion invested globally in start-ups during Q1 2026, according to Crunchbase.

Life sciences led the way in the quarter, accounting for 54% of the total (€119.5 million) followed by fintech at 13% (€28 million) and software 12% (€26.9 million). While AI represented just 2% of the total on a sector basis.

“While funding fell across most deal sizes, the outcome must be seen in the context of an exceptionally strong start to last year, when Irish firms raised more than half a billion euro, which was a record for a first quarter,” said Caroline Gaynor, chairperson, IVCA. “This is glass half full territory as it once again highlights our exposure to overseas investment, but also emphasises the appetite for quality Irish tech firms, despite unprecedented spending on AI in the US.”

Sarah-Jane Larkin, director general of the IVCA said that it was hard to predict the impact of the Iran War on the next quarter in terms of investor confidence. “Ireland is a small market subject to global geopolitical headwinds. But local policy initiatives may mitigate against this to the benefit of early stage Irish start-ups looking to raise funding this year. For example, Enterprise Ireland has raised its direct investment limit from €250,000, and we should see the benefits of the Government’s €250 million Seed and Venture Capital Scheme 2025-29 start to feed through this year.”

Funding declined across all deal-size bands except transactions of less than €1 million. In the €3 million-€5 million range, investment fell 77% to €7.9 million from €35 million a year earlier. Deals worth between €5 million and €10 million dropped 62% to €16.5 million from €43.8 million over the same period.

The top five deals of the quarter were Neurent Medical (€62.5 million), Aerska (€33 million), Evervault (€21 million), Circit (€20 million) and XFuel (€18.5 million).

TechCentral Reporters

Read More: Irish Venture Capital Association IVCA start-ups venture capital