Focus on fundingThe pace has slowed after a good start for some, writes Jamie Smyth, Technology Reporter
Venture capital firms invested €57.4 million in Irish-based technology companies in the second quarter of 2005, according to a new survey published today.
The survey, which was compiled by corporate finance company Ion Equity, found that investment in Irish technology firms grew by 17 per cent in the first quarter of 2005 when compared to the same period in 2004.
The €57.4 million represents a 35 per cent decline on the €75.4 million raised by Irish companies in the first quarter 2005.
The average deal in the second quarter also fell when compared with the first quarter, down to €4.4 million from €6.3 million.
The survey said this funding decline was due to a small number of particularly large fundraisings completed during the first quarter.
An analysis of the 13 deals struck during the second quarter show that several international companies invested in Ireland, including Cazenove Private Equity, Innovacom and Fidelity Ventures.
The venture capital arm of US telecoms company Motorola, which is called Motorola Ventures, made a €5 million investment in the Dublin-based company Anam Mobile last month.
Anam Mobile, which was founded in 1999 and develops software to enable mobile operators to develop messaging applications, also has a reseller agreement with Motorola in Asia.
"It was very important for us to get a funding deal with Motorola, which has industry experience and reach to help us grow," said Anam Mobile's marketing manager Loughlin O'Nolan.
"We also work on research and development activities with Motorola to develop new technologies," said O'Nolan, who added that the funding environment had picked up considerably.
The survey by Ion Equity shows that the two biggest investments in the second quarter were a €12 million deal closed by the telecoms firm, Imagine, and a €10.3 million deal closed by the banking software firm CR2.
"The survey shows that the fundraising market for quality Irish companies continues to be strong, particularly for those in the financial and telecoms sector," said Ion Equity director Ulric Kenny. "We are encouraged by the increased activity of corporate investors who can add real strategic value to young technology companies. We are seeing this theme repeated across Europe, as evidenced by Intel's recent investment in Picochip."
Picochip was a client of Ion Equity in Britain, which recently raised $21 million in funding.
Kenny said there was also a trend developing whereby US venture capital firms invested directly in Irish technology companies.
This was evidenced in a recent €8.3 million investment deal between US firms Fidelity Ventures and General Catalyst Partners and Irish company Qumas.
