Venture capital funding falls 20% in third quarter

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

Deals under €10m still show strong growth

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5 December 2019 | 0

Venture capital funding into Irish firms fell by 20% in the third quarter of 2019, reaching €136 million. This comes from a survey from Irish Venture Capital Association (IVCA) VenturePulse, published in association with William Fry.

Funding for the first nine months rose by 3.7% to €566 million from €546 million in the same period last year.

While Neil McGowan, chairman of the IVCA said there has been a notable decline in deals above €10 million this year, there has been a 36% increase in companies achieving investments below €10 million. This figure is up 11% versus the same period last year.

 

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Plus, seed funding in the third quarter is up 30% compared to last year and the number of companies that have raised seed funding this year is up 90%.

Third quarter funding came largely from software (34%), food and drink (26%) and life sciences (14%).

Sarah-Jane Larkin, director general, IVCA, highlighted a decline in the proportion of funding coming from overseas investors with a fall of 60% for the quarter and 40% in 2019 so far.

This is again due to the decline in the number and amount of investment in larger funding rounds,” said Larkin. “Major overseas venture capital investors are less attracted by deals below €10 million which have characterised the Irish market this year.”

The reduction in overseas investment has emphasised a need to introduce policy initiatives to unlock greater local private sector funding into domestic innovative companies, as happens in other European countries, said Larkin.  

“While they remain an important player in the Irish market, as a nation we should not be overly dependent on overseas investors but create the environment locally to create Irish multinational companies.”

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