Irish SMEs raise €314m in year to September 2014
20 November 2014 | 0
Irish SMEs raised €314 million in venture capital funding in the nine months to 30 September, an increase of 35% on the same period last year according to the Irish Venture Capital Association’s latest VenturePulse survey.
A total of 95% of total funds raised were used for growth or further expansion. However, the study warned that just 5% of funding went to start-ups and that expansion funds needed to be renewed.
“We remain optimistic that current fund raising rounds due to completed by a number of VC firms over the next few months will sustain this encouraging overall level of activity,” said John Flynn, chairman, IVCA (pictured).
Flynn said that the Irish venture capital community continues to be the main source of funding for SMEs both through direct investment and as the local lead investor for international syndicate investors who invested €170 million in this period.
However, Regina Breheny, director general, IVCA expressed concern that first round seed funding for start-ups has fallen to 5% of funds. This compared to 21% in 2013 and to 19% in 2012.
“The seed funds supported by the banking sector and Enterprise Ireland’s Seed & Venture Capital Programme of 2006-2012 are close to being fully invested. These funds need to be renewed if entrepreneurs are to be supported as actively as in the last five years,” Breheny said. “These funds were raised almost exclusively by Irish VC fund managers who during this period supported the creation of up to 20,000 jobs and attracted over €825 million of capital into Ireland. It is highly significant that this leveraged the State’s investment through the Seed & Venture Capital Programme by almost seven times.”
The VenturePulse survey also found that since the onset of the credit crunch in 2008, approximately 980 Irish SMEs raised venture capital of €2 billion.