Funding rises for Irish start-ups in emerging technologies

More than half of Irish product-focused technology firms that obtained funding in 2017 were established during the last five years, new figures show.

Overall, 183 such companies received funding worth a combined €580.2 million last year, according to data from TechIreland. Of these, 113 start-ups were founded since 2013 with 11 formed in 2017 itself.

The largest funds were raised by Iterum Therapeutics and Arralis, which obtained €59.5 million and €50 million in funding respectively. Radar and wireless communications specialist Arralis was the overall winner of The Irish Times Innovation of the year award in 2017.

The health and medical space was far and away the top sector for fundraising. It accounted for 31 per cent of all financing secured during the year. It was followed by fintech, industrial tech, telecoms, green energy and enterprise solutions.

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"We're funding a lot of sectors but health/medical gets a lot of the larger rounds and it is an area in which we are traditionally very strong," said Niamh Bushnell, who heads up TechIreland.

“Healthtech is always going to be a driver of innovation in Ireland and fintech is also something at which we are very good, but it is also nice to see that newer areas such as green energy and agritech are starting to come through,” she added.

Emerging technologies is another area where funding is growing, with companies raising more than €250 million last year across artificial intelligence, augmented reality/virtual reality, blockchain, the internet of things and software-as-a-service.

Mapping start-ups

TechIreland, a public database that went live last year, is led by Ms Bushnell, the former Dublin commissioner for start-ups. The initiative aims to provide a detailed portrait of Ireland’s start-up scene by mapping, tracking and showcasing innovation across the Republic.

The organisation's data differs substantially from alternative figures compiled by the Irish Venture Capital Association (IVCA), which was forecasting that €1 billion would be raised by firms here last year.

Ms Bushnell told The Irish Times that its figures do not include an estimated €350 million from services-based companies, multinationals that have a base locally and firms in the North. By contrast, TechIreland's figures include €48.5 million from venture funds, government grants and pitch competitions that IVCA does not track.

She added that rather than directly competing with IVCA, TechIreland sees itself working with the organisation to help it with data collection.

Record year

The most active investors recorded in 2017 were Atlantic Bridge, ACT, AIB Seed Capital, Delta Partners, Elkstone, Growing Capital, Frontline Ventures and Suir Valley. The data show a number of new VC firms also invested locally for the first time last year, including 415 Investments, Cylon, Venbio, Canaan Partners and True Ventures.

TechIreland’s figures show 23 companies obtained €73.7 million in the final three months of 2017. These included Transfermate and Nuritas, which raised €30 million and €16 million respectively.

Farther afield, figures compiled by PitchBook and the National Venture Capital Association show the US venture capital industry ended 2017 strongly with $84 billion invested in 8,035 companies across 8,076 deals. This was the highest annual amount of capital deployed since the height of the dotcom boom.

Unicorns (that is VC companies valued at $1 billion or more) alone raised $19.2 billion in capital in 2017, more than they have in any other year on record.