Venture capital funds invested more than €38 million in small and start-up companies in the Republic last year, 18 per cent more than in 2003, according to a report released yesterday by Enterprise Ireland.

The 81 individual investments amounted to the highest level since the group started its so-called seed fund investment programme in 2000.

Start-up companies attracted €15.1 million, equal to 39 per cent, of the investment, while early stage companies soaked up €20.2 million, or 59 per cent, of the funds, the report showed.

As part of its 2000-2006 national development plan, Enterprise Ireland has committed €98 million to develop the venture capital market for small and medium-sized companies in the Republic.

Micheál Martin, Minister for Enterprise, Trade and Employment, yesterday welcomed the role played by Enterprise Ireland in promoting the seed funds.

"The availability of risk capital is an essential ingredient in growing high-growth start-up and early stage companies," said Mr Martin. "In 2004 almost all of the companies attracting investments were in these categories."

Since 2001, €133 million has been invested in 75 companies through the seed funds, with more than 60 per cent of the money going to software firms. Life Sciences received €16.5 million, or 19 per cent, of the total investment since the start of the programme.

Delta Partners, the Dublin-based early-stage technology venture capital firm, was the most active fund, making 23 investments worth €9.7 million in 2004. Since the start of the programme it has made 74 investments worth €34.7 million.