Venture capital funding to Irish technology firms up by 8.9%

Venture capital funding to Irish technology firms increased by 8.9 per cent to €249.4 million in the first quarter of 2021, up from €228.9m in the same period last year, according to the Irish Venture Capital Association (IVCA) VenturePulse survey.

“Funding appears to have shaken off any restrictions caused by Covid-19,” said IVCA chairwoman Gillian Buckley.

“This is reflected in the fact that the number of deals increased by 65 per cent to 74, compared to 48 in the same quarter last year, largely driven by a welcome recovery in early stage funding.”

She pointed out that funding to start-ups and early stage indigenous companies for the 12 months last year fell by almost a third. “We hope the more positive outcome in the first quarter is a harbinger of recovery for early stage funding in 2021,” she said.

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The first quarter 2021 bounce in start-up and early stage funding is reflected in the fact that deals in the €1-5 million category jumped by 84 per cent to €70.3 million from €38 million, while the number of transactions nearly doubled from 18 to 33.

Deals of less than €1 million grew by 53 per cent to €12.9 million compared to €8.4 million in the same period last year. The number of deals in this category rose by 55 per cent to 34 from 22.

"Government support for start-ups and early stage companies through Enterprise Ireland and the Ireland Strategic Investment Fund is beginning to show a real impact," said IVCA director general Sarah-Jane Larkin.

“Without this it is unlikely we be seeing the growing importance of sectors such as life sciences to the Irish economy.”

Life sciences accounted for €130 million or over half (52 per cent) of funding in this quarter driven by an €89 million round for Mainstay Medical. The next highest category was software at €46.7 million (19 per cent) followed by cybersecurity at €21.9 million (9 per cent).