Second highest quarter on record for Irish venture capital funding – IVCA

VenturePulse survey shows “worrying” gap in deals under €10m as life sciences leads the way

Trade

Sarah-Jane Larkin and Gerry Maguire, IVCA

SMEs secured €494 million in venture capital funding in the second quarter was the second highest on record, up 7% on the same period last year, according to the IVCA VenturePulse survey published today in association with William Fry. Overall funding for the half year fell by almost a quarter (22%) to €752.7 million.

Once seed funding is excluded the data showed a gap in deals under €10 million.

Gerry Maguire, chairperson, Irish Venture Capital Association (IVCA), said: “Deals in the €5-10 million range fell by 44% to €27 million in the second quarter, compared to the same time last year. This worrying trend continued right across all deal sizes from €1-€5 million. It suggests that companies are doing well raising early stage seed funding but are struggling to kick on in the next vital growth phase.”

Maguire added that while the number and value of deals in the €10 million and over range had performed well in the second quarter, more than 90% of this funding came from international investors.

“This is a testament to the quality and ambition of Irish companies, but points to the importance of having Irish funds of scale that can co-invest or lead these rounds. This really highlights the need to increase the availability of growth finance from local sources,” he said.

Sarah-Jane Larkin, director general of the IVCA, said that thanks to long-standing government policies supporting early stage funding, the recovery in seed funding had continued from the first quarter of this year. Seed funding, or first rounds raised by SMEs, in quarter two rose by 18% to €53.2 million, compared to the same period last year. Seed funding for the half year rose by 79% to €93.6 million.

“While seed funding remains robust, the IVCA is looking forward to the report of the implementation committee set up by Peter Burke, Minister for Enterprise, Trade & Employment, on measures to assist these exciting, high potential start-ups take their next steps through greater access to scaling finance,” said Larkin.

The life sciences sector with €297 million (39%) led the way in funding for the half year followed by envirotech (13%); regtech (12%); fintech and software (both 9%).

TechCentral Reporters

Read More: Irish Venture Capital Association IVCA VC