Overall increase in VC activity disguises negative impact of Covid-19 – report

Sarah-Jane Larkin, Irish Venture Capital Association
Sarah-Jane Larkin, Irish Venture Capital Association

Value of deals down by almost a half

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5 May 2020 | 0

Venture capital funding to Irish technology firms increased by 16% to €228.9 million in the first quarter of 2020 but the figures disguise a serious threat by Covid-19 to SME funding this year, according to the Irish Venture Capital Association VenturePulse survey published today in association with William Fry.

The value of deals in the €1-€5 million category fell by 44% from €68.8 million in the first quarter of 2019 to €38 million this year. The number of deals also fell from 30 to 18. Deals in the under €1 million range fell by 39% from €13.8 million to €8.4 million with the number falling from 36 to 22.

Sarah-Jane Larkin, director general, IVCA, said: “There is a real danger that we will lose a generation of innovative Irish start-ups. Without further Government intervention, our fear is that Covid-19 will act like a hard frost which will wipe out the majority of Irish seed companies.”

 

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In the first quarter 2020, deals in the €10-€30 million category fell by 33% from €86.6 million to €58.2 million. Compared to the same period last year. Deals in the €5-€10 million range fell slightly by 5% from €27.6 million to €26.1 million.

“A recent sentiment survey of our members found that funding overall in 2020 to Irish SMEs could fall by up to 50% depending on the length of the crisis,” said Larkin.

“If there was ever a time for an initiative to mobilise additional private capital to Irish funds, this is it,” she said.

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