Venture capital investment into Irish SMEs grew by 11% in 2019

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

Annual growth stimulated by record fourth quarter

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9 March 2020 | 0

In 2019, venture capital funding into Irish SMEs grew by 11% year-on-year, from €740 million to €820 million. This figure comes from the Irish Venture Capital Association VenturePulse survey published in association with William Fry.

This growth was stimulated by a record fourth quarter where funding grew 120% to €253 million from €115 million in the same period last year.

“While 2019 was below the peak of €994 million in 2017, a small number of large deals can have a significant impact – overall it is encouraging to see growth over last year,” said Neil McGowan, chairman, Irish Venture Capital Association (IVCA).

Growth extended into seed or early stage companies where funding was up 55% to €76 million in 2019 compared to €49 million in the previous year.

It also found that 87% of funding last year was raised by technology companies. Software companies raised 39% of funds, followed by life sciences at 20%. There were strong contributions from the fintech and cybersecurity sectors, it said.

“The impact of Enterprise Ireland’s new €175 million Seed & Venture Capital Scheme (2019-2024) is starting to be felt in the Irish marketplace which is to be welcomed,” McGowan added.

Sarah-Jane Larkin, director general, IVCA said that there had been growth across all deal sizes during the year and an increased prevalence of private equity but notably, there was a 175% rise in the value of deals between €5-10 million. 

Funding in the €5-10 million category grew to €102 million in 2019 from €37 million the previous year. The number of companies availing of this funding grew from five in 2018 to 16 in 2019.

“This is important as these amounts are typically raised by scaling companies who are at a critical stage in terms of expansion in employment and revenues,” said Larkin. “At a time when a programme for Government is being considered, it is important that policy makers recognise the need to help create the right environment for local entrepreneurs to build a knowledge based indigenous Irish economy.”

A DCU report found that employment in venture capital and private equity backed firms increased by an average of 27% per annum over a three-year period from 2016. Larkin compared this figure to an overall increase in employment in the economy of 3.3% per annum over the same time frame.

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