Venture capital investment in Irish firms plummets

Venture capital investment in Irish-based firms fell significantly in the first quarter of the year, but a recovery is expected in the coming months.

Latest figures from KPMG show Irish-based businesses raised over $68m (€61m) in the first three months of the year, down hugely from around $200m in the final quarter of 2018.

"The pattern of venture investing in Ireland can be quite volatile quarter-to-quarter and can be heavily influenced by one or two large fundraisings. Expectations are that the numbers will rebound significantly in the second quarter," said KPMG's Anna Scally.

Indeed, the healthcare and technology sectors accounted for around $67m of the first quarter investment value.

However, KPMG's positive outlook is seemingly at odds with that of the Irish Venture Capital Association, which recently bemoaned a 25% fall in overall VC funding in the Irish technology sector in 2018 and called the drop-off "worrying".

A recent InterTrade Ireland venture capital conference found a lack of investor readiness among many Irish SMEs to be a significant barrier to accessing venture capital funds.

"The number of options for funding is expanding year-on-year, so it’s vital that companies have the right information to help them access these funds and are investor ready," InterTrade Ireland's Margaret Hearty said.

Meanwhile, Irish business sentiment picked up this month on the back of the delay to the Brexit deadline.

"With Brexit pushed out, the threat of a no-deal outcome has been staved off for now, and firms look to have taken some comfort from this judging by the bounce in business sentiment in April," said Bank of Ireland chief economist Loretta O'Sullivan.

"Recent developments haven't translated into a corresponding uptick in firms' growth ambitions, though, and with households also remaining worried about the economy, it seems relief that a cliff edge Brexit has been avoided is tinged with an understanding that unless the impasse in Westminster is broken, the can may just have been kicked down the road," she said.

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