Venture capital activity collapses
The value of venture capital deals in Ireland has decreased by over 50%, in the third quarter, compared to the same quarter in 2002, according to the survey by Ernst and Young and VentureOne.
The number of deals in the software sector in Ireland has declined by 75% in the third quarter Q3 2003 when compared with Q3 2002.
In money terms the overall fall in investment represents a drop of over 20m million from 41.87m million in Q3 2002 to 20.30m in Q3 this year.
Commenting on this findings, Enda Kelly of, Partner, Emerging Growth Markets, Ernst and Young said: "Even when taking seasonal factors into account, the findings, while disappointing are not surprising and reflect the low levels of activity in the global venture capital landscape.
"It is worth noting that investment in the communications sector has increased significantly this year. Last year a total of two deals were financed in the sector and this year, taking three quarters into consideration, there have been five deals financed, representing an increase of 150% year on year.
Venture capital activity in Europe historically lags behind the US by at least two quarters. With investment holding steady in the US, we can expect to see Europe following suit in the first half of next year. The survey found that only 32 deals were financed to date this year in Ireland, compared with 38 over the same period in 2002.
There was 50% decrease in number of deals financed in the overall information technology sector for Q3 this year, compared with same period in 2002
The decline in venture capital activity in Ireland is in sharp contrast to Britain where there was a 52% increase in total investment to 277m, representing almost half of Q3 investments in Europe.
On a European basis, 616m was invested in 191 deals in Q3 20% decline in money terms and a 25% decline in deals from the second quarter of the year.
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