Support for hi-tech firms increases

SUPPORT for Irish technology companies is gathering pace, according to a survey.

In the second quarter of 2010, investors pumped €76 million into Irish firms.

That represents a 33% rise on the same period last year, according to the Irish Venture Capital Association (IVCA).

The IVCA’s Venture Pulse survey tracks funding raised from domestic and international venture capital funds, AIB and Bank of Ireland seed capital funds, Enterprise Ireland and private investors.

Of that, €57m involved follow-on expansion and other developments within the companies.

Irish venture capitalists contributed 45% for expansion projects, with the remaining 55% provided through syndicated deals put together by international venture capitalists.

That money is being used to scale up the international business opportunities of indigenous Irish SMEs, said the IVCA.

For every euro invested by Irish VCs, an additional €1.20 is contributed by overseas investors who see value in the Irish technology sector, said IVCA director general Regina Breheny.

“As part of the due diligence process international investors like the reassurance that local VC investment provides,” she said.

The survey also found that first round funding from Irish sources was steady at 25% of total amount raised.

That was in line with the funding levels from domestic sources achieved throughout 2009.

And that figure was up from 21% in 2008 and 6% in 2007 and that funding was put up mainly by private investors.

It also emerged that 50 high-tech companies raised funds in the second quarter compared to 35 in the same period last year.

VC investment accounted for three quarters of the amounts raised.

Over the period, 14 Irish VC funds invested in 19 companies, whereas 13 firms got support from a total of 19 international VC groups.