According to the most recent Irish Venture Capital Association VenturePulse survey in association with William Fry, VC funding of €494 million into Irish SMEs in Q2 was the second highest on record, up 7% on the same period last year. However, with the exception of seed funding, the data reports a gap in deals under €10 million. Overall funding for the half-year fell by almost a quarter (22%) to €752.7 million.
The Irish Venture Capital Association VenturePulse survey has been recognised by the VC industry and by government and international bodies, including the OECD, as one of the definitives and most up to date sources of fundraising activity in Ireland. It is the only provider of Ireland VC funding statistics which publishes its source data or actual deals.
The data covers equity funds raised by Irish SMEs and other SMEs headquartered on the island of Ireland from a wide variety of investors.
In the need for growth
Gerry Maguire, chairperson, Irish Venture Capital Association, said that one needed to drill down into the figures to get the true state of affairs for Irish SMEs looking to expand and raise finance.
“Deals in the €5-10 million range fell by 44% to €27 million in the second quarter, compared to the same time last year. This worrying trend continued right across all deal sizes from €1-€5 million. It suggests that companies are doing well raising early stage seed funding but are struggling to kick on in the next vital growth phase,” he said.
Maguire added that while the number and value of deals in the €10 million plus range had performed well in Q2, over 90% of this funding came from international investors. “This is a testament to the quality and ambition of Irish companies, but points to the importance of having Irish funds of scale that can co-invest or lead these rounds. This really highlights the need to increase the availability of growth finance from local sources.”
The time of the seed
This latest research is the result of detailed information supplied internally by members of the Irish Venture Capital Association and from published information where IVCA members were not involved.
Sarah-Jane Larkin, director general of the IVCA, also said that thanks to long standing Government policies supporting early stage funding, the recovery in seed funding had continued from the first quarter of this year. Seed funding, or first rounds raised by SMEs, in quarter two rose by 18% to €53.2 million, compared to the same period last year. Seed funding for the half year rose by 79% to €93.6 million.
“While seed funding remains robust, the IVCA is looking forward to the report of the implementation committee set up by Peter Burke TD, Minister for Enterprise, Trade & Employment, on measures to assist these exciting, high potential start-ups take their next steps through greater access to scaling finance,” added Larkin.
The life sciences sector with €297 million (39%) led the way in funding for the half year followed by envirotech (13%); regtech (12%); fintech and software (both 9%).
The top five deals in quarter two worth over €30 million were regulatory compliance company, Corlytics (undisclosed amount); life sciences firm, SynOx Therapeutics (€70.3 million); fintech company, AccountsIQ (€60 million); cybersecurity specialist, Tines (€50 million) and marine technology firm, XOCEAN (€30 million).
Read the orginal article: https://www.eu-startups.com/2024/09/irish-vc-funding-raises-record-e494-million-in-q2-but-struggles-to-get-to-growth-phase/
