Funding for tech firms drops €20m

FUNDS raised by Irish technology firms have fallen by close to €20 million this year, while the number of companies looking for financing more than doubled.

A survey from the Irish Venture Capital Association found that total funds raised to the end of October by Irish-based technology companies dropped to €141.5m compared with €162.6m in the same period last year.

It also found that the number of companies raising funds has more than doubled from 31 to 73.

Professor Michael Donnelly, chairman of the association, said: “While the amount raised for the year to date is down, the doubling of firms supported, and momentum over the last four months, suggests a very active year for the venture capital industry.”

Despite this year-on-year drop Irish technology firms have raised more than €75 million in the four months to October this year from investors.

This compares with funds of €53.9m raised in the same period last year.

The number of companies that raised funds in this period was 42, compared to 12 in the same period last year and amounts raised ranged from €200,000 to €15.5m.

Prof Donnelly said the fact that this growth occurred during a period when many venture capital firms were in the middle of raising capital, and exceeds the amount invested in the first six months, suggests that there is a momentum building which augurs well for the future.

In the four months to the end of October there were 17 Irish-based venture capital funds involved in financing and 11 international funds.

In the corresponding period last year, there were eight Irish-based venture capital funds and six international funds involved.

Regina Breheny, director general of the association, said this suggests good support from local and international venture capital firms.

She added that there was a good sectoral spread of support and while the bulk of Irish venture capital investment continues to be invested in tech firms this has now spread beyond traditional IT and software firms to life sciences including drug delivery and medical devices.

In the drug delivery and medical device sector, eight companies raised €7.25m in the period but nothing last year.

However, in the telecoms sector, four companies raised €9.9m in the period whereas four companies raised €27.8m last year during the same period.

Thirty other technology firms including nano technology, fibre optics, photonics and semi-conductor chips raised €58.2m in the four months to the end of October this year, whereas last year eight companies raised €26.1m.