More money going to fewer firms as investors regain confidence

XOCEAN, the ocean data company, raised $32.5m in a Series B funding round.

Investors became braver in the three months to June ahead of an expected interest rate reduction which may ease fears further, new figures suggested.

A Venture Pulse report by professional services firm KMPG showed venture capital investment rose in the second quarter, but more money was being pumped into fewer companies.

Venture capital investments injected $237m (€217m) into 24 Irish deals, jumping from $172.5m across 33 deals in the same period a year earlier.

The head of technology and media at KPMG in Ireland, Anna Scally, remained cautious on the outlook on investment into Irish firms.

"Irish and European investors are more confident this quarter,” she said.

Ms Scally said that uncertainties created by elections this year in the US and Europe coupled with “a sluggish” initial public offering market and relatively high interest rates mean investors will remain wary and “it’s unlikely to see venture capital investment return to the levels reached in 2021 and 2022”. 

The European Central Bank (ECB) announced its first interest rate cut in June, following an aggressive campaign of rate hikes since July 2022. Another reduction is expected when the regulator meets again in September. 

Investors continued to bet on companies in areas including AI, while the separate KPMG Pulse of Fintech report for the first half of the year showed funding into fintech also increased significantly.

Four deals accounted for three quarters of all Irish venture capital investments in the three months to the end of June.

The top four deals included a $110m fund raise by biotech SynOx Therapeutics, a company developing treatments for certain types of giant cell tumors.

XOCEAN, the ocean data company, raised $32.5m in a Series B funding round, while digital health and wellbeing provider Spectrum.Life secured $18.3m in fresh funding.

Nory, a tech business that provides restaurants with services used to scale and manage their operations more effectively, secured its largest round of funding earlier this year of $16m amid lingering inflationary pressures and high interest rates which have spooked many venture capitalist in the last two years.

This was the second round of funding completed by the start-up, having previously raised around €7m.

“When we were doing our seed round it was more challenging,” founder Conor Sheridan said.