Venture capital funding falls to lowest level in 10 years
Venture capital funding into Irish SMEs in the second quarter fell to its lowest level in 10 years, according to the Irish Venture Capital Association VenturePulse survey published today in association with William Fry.
Funding plummeted to €112.6m, down from €494m in the same quarter last year, the lowest recorded by IVCA since the second quarter in 2015.
As a result, funding in the first half of the year fell 14% to €645.5 million from €752.7 million the previous year.
The life sciences sector with €255.3 million (40%) led the way in funding for the half year, followed by cyber security (18%); fintech (14%); software (9%); and AI & machine learning (8%).
“The fall off would have been worse if not for a record first quarter 2025 which saw an increase of over 100% to €532.8 million compared to the same period last year,” said Caroline Gaynor, chairperson, Irish Venture Capital Association (pictured).
She added that the quarterly result was largely explained by an 81% pull back by international investors, which invested €69.5 million in the quarter, compared to €375.3 million the previous year, a shortfall of more than €305 million.
“This is a timely warning sign for Ireland and highlights the need for us to stand on our own feet in terms of funding and backing for our brightest and best indigenous start-ups, instead of depending on volatile international support,” she said.
Irish Venture Capital Association director general Sarah-Jane Larkin said that bearish international sentiment was reflected in quarter two deal sizes, with only one deal (Nomupay) in the €30 million-plus category, and only one deal in the €10 million-plus category (Kota).
“There was a falloff in all deal sizes, with the exception of those under €1 million,” said Larkin. “Seed funding, or first rounds by SMEs, fell by over a half to €25.5 million.”
Larkin added: “The IVCA applauds the recent DETE report which found that ‘there is a need for future government intervention to improve the supply of scaling finance’. This new data emphasises the urgency of the situation.
“In an increasingly isolationist global economic market, it is more important than ever that we are not dependent on international capital or sentiment and have the capacity to fund our own indigenous winners.”
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