Drop in numbers of Irish firms getting venture capital

IRISH companies seeking venture capital funding felt the pinch in the third quarter of the year as the amount raised fell by €5 million to almost €71m.

The number of firms that managed to raise funds also dropped to 16 compared to 43 in the same period in last year.

According to a report from the Irish Venture Capital Association (IVCA) total funds raised so far this year have increases 23% to €174m compared with last year.

Director of the IVCA, Regina Breheny said: “VC funding has held up well despite a shortage of liquidity across the financial sector in general.

“This is important as a vigorous indigenous Irish tech sector has an important role to play in building a knowledge economy.”

Amounts raised ranged from €200,000 to €25m.

The number of companies that have raised funds this year is 64 compared to 73 in the same period in 2007 and 31 in 2006.

In the third quarter there were 11 Irish-based venture capital funds and private investors involved and nine international funds. This compares with 17 Irish and 11 international last year. The number of Irish investors involved so far this year is 22 representing 92 investments — 16 international funds made 18 investments.

“Irish companies continue to attract interest from international as well as local VC investors,” said Ms Breheny.

In the drug delivery and medical device sectors, three companies raised €3.9m in the last quarter whereas eight companies raised €7.25m in the same period last year. There were no investments in this sector in 2006.

In the telecoms, two companies raised €17.6m, compared to four companies raising €9.9m in 2007, while four raised €27.8m in 2006.

In the communications sector two firms raised €25.2m while four in the business services sector raised €21.7m.

Irish venture capital firms have invested €1.2 billion in Irish firms since 2000.