Technology firms 'raised €200m in 2005'

Irish technology companies raised almost €200 million from investors last year, the highest level of venture capital support since 2001 and 2002.

The Ion Equity Techpulse venture capital survey shows that technology companies raised a total of €198.2 million during 2005, an increase of 18 per cent on 2004.

Ion Equity director Ulric Kenny said yesterday that the total was the highest since the "tech bubble" years of 2001 and 2002. "The 18 per cent growth in technology investment in Ireland is in stark contrast to investment across the rest of Europe, which we estimate did not grow in 2005," he said.

"There are signs of renewed strength in Irish technology, and we expect continued strong investment in 2006."

Telecommunications companies accounted for the biggest share of the investment cake, taking a 49 per cent slice of the cash raised during the year. It also registered the biggest single deal, the €18 million investment in Irish Broadband in January 2005.

The other big investments in the sector included telecoms software firm Aepona, which raised €15 million from Polaris Ventures, Amadeus Capital Partners and Trinity Venture Capital.

The new national television station, Channel 6, raised €14 million from ACT Venture Capital and Delta Partners, and telecoms service provider Imagine drew €12 million from Cazenove Private Equity.

Mr Kenny highlighted that the year's two biggest investments were in telecoms. "These are the first significant private investments in Irish telecoms service providers since late 2000, and mark the sector's return to favour with investors," he said.

"We expect further investment in private companies as this sector pursues the opportunities of deregulation and advances in the wireless technology."

He also noted that the Republic was attracting capital from foreign investors, who contributed to over half the 45 deals done during the year. That trend began to develop during 2004.

Irish investors were active in taking on new companies and in giving follow-on funding to existing businesses in their portfolios. ACT Venture Capital and Delta Partners were the most active, with disclosed participation in nine and seven Irish deals respectively.

The survey shows that the busiest period was the second quarter of the year, during which 14 deals were done, for a total of €59.9 million.

However, while there were 13 deals done during the first three months of 2005, that period accounted for the most money raised, a total of €77.5 million. Irish Broadband and two deals valued at €15 million each boosted this total.

The second half of the year was quieter, with €60.9 million raised in 18 investments over the period. However, normally quiet December delivered a healthy €24 million total, thanks to Silicon and Software Systems, which raised €10 million from ACT and the €14 million drawn down by Channel 6.