Venture capital funding for Irish firms hits record

Irish companies hit a record in venture capital funding in the first quarter of the year, with investment increasing by almost a third, even as smaller companies saw a decline, new figures from the Irish Venture Capital Association indicate.

The increase comes despite headwinds in the global investment sector, which has seen layoffs across the tech sector and increased borrowing costs as central banks bring a decade of cheap money to an end.

The latest VenturePulse survey showed Irish small and medium-sized companies raised €502 million in capital funding in the first three months of the year. That was up from €380 million in the same period a year earlier, but the figures were boosted by a single deal, with Cork-based solar developer Amarenco raising €300 million in March.

“This was a robust quarter for Ireland when compared to global VC funding, which fell by 53 per cent in the first three months of the year,” said Leo Hamill, chairperson of the Irish Venture Capital Association.

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“While Amarenco boosted the figures, if you exclude deals above €30 million in first quarter 2023 and 2022, this year still saw a rise of 70 per cent to over €200 million for the first three months, which reflects well in view of global headwinds across the sector.”

Among the major deals were medtech Fire1, which raised €27.3 million, and energy technology company Supernode, which raised €16 million. Raising €15 million each were Assure Hedge, Astatine and Neuromod.

Deals in the €10m to €30m range were up 95 per cent on the previous quarter. But although deals over €3 million performed well, companies seeking seed and early stage funding saw deals saw a decline.

Deals in the €1 million to €3 million range declined in value to €10 million, down two-thirds compared with the previous quarter. Those under €1 million in size were down 28 per cent to €6.5 million, and seed capital amounted to €7.5 million, down two-thirds compared with the final quarter of 2022.

Some 21 indigenous companies raised between €5 million and €30 million in this quarter.

International venture capital companies continued to play a big role, accounting for 40 per cent of the total invested in the first quarter. When rounds above €30 million were excluded, international funding increased 210 per cent on the same period a year earlier.

“In the context of a global slowdown in VC investment, the high level of international funding secured by Irish companies clearly demonstrates a strong appetite for innovative indigenous enterprises which reflects their high quality and realistic valuations,” said Sarah-Jane Larkin, director general of IVCA said.

The environmental industries sector was top for funding, accounting for 66 per cent of the funding raised in the quarter, with life sciences at 11 per cent.

The VenturePulse data covers equity funds raised by Irish SMEs and other SMEs headquartered on the island of Ireland, from information supplied internally by members of the IVCA and from published information from non-members.