Venture capital funding in Irish SMEs hits record €1.48bn

But report warns of 'choppy' environment for firms raising less than €5m

Sarah-Jane Larkin, director general, and Gerry Maguire, chairperson, Irish Venture Capital Association. Ms Larkin said the Government’s €250m Seed & Venture Capital Scheme 2025-2029 'couldn’t come at a better time'.

Funds invested into Irish technology SMEs jumped 9% to a record €1.48bn in 2024, according to a report by the Irish Venture Capital Association (IVCA). The IVCA reported a record fourth quarter investment in 2024 of €535m, 162% up on the same period the previous year.

“Growth in the year and final quarter was driven by big investments which demonstrates that Ireland has the capacity to create and scale world class tech firms,’ said IVCA chair Gerry Maguire.

The top five deals in quarter four 2024 were: Dublin-headquartered medical device company, Fire1 (€116m); Louth-based sea drone developer, XOCEAN (€115m); Dublin headquartered travel software firm, Nuitée (€46m); Dublin-headquartered AI company, Nuritas (€42m) and Dublin-based fintech firm, NomuPay (€35.9m).

Life sciences accounted for 37% (€552.9m) of the total raised in 2024, followed by Software: 13% (€185m); Envirotech: 11% (€161.7m); Fintech: 8% (€119m) and Data: 8% (€115m).

However, while the funding for larger venture capital projects is bullish, the funding environment for firms looking to raise less than €5m is described as “choppy”, as deals right across all sizes below €5m fell during 2024 and in quarter four, the survey showed.

Deals in the €3-€5m range fell by 37% to €82m for the year, and by 56% to €17.6m for the fourth quarter 2024, compared to the same period the previous year. Funding in the €1-€3m category fell by 24% to €105m for the year and by 63% to €23.6m for the quarter.

Investments below €1m declined by 4% to €28.9m for the year and by 19% to €7m for the quarter. Seed funding, or first rounds raised by SMEs, decreased by 4% annually to €127m and by 55% to €17.9m in the quarter.

IVCA director-general Sarah-Jane Larkin said the Government’s €250m Seed & Venture Capital Scheme 2025-2029 “couldn’t come at a better time,” given global economic and political turbulence, largely driven by the new US administration. Applications for the first call of up to €100m is to be submitted to Enterprise Ireland by Thursday, February 20.

Artificial Intelligence (AI) accounted for over €100m of the total VC investment into Irish firms last year. Mr Maguire predicted that the recent impact of Chinese operator DeepSeek is likely to increase, not decrease, appetite by VC investors in the sector.

“The arrival of players such as DeepSeek has the potential to boost margins and decrease development costs for AI start-ups. We are potentially witnessing the democratisation and ease of participation by AI developers, in the same way that Software-as-a-Service or cloud computing transformed and disrupted the traditional software model.

“There is massive potential in AI applications across healthcare, climate, education and other sectors, and this will be boosted by lower costs of development which represents a major opportunity for Ireland.”

The Irish Venture Capital Association is the representative organisation for venture capital and private equity firms in Ireland. The VenturePulse survey report covers equity funds raised by Irish SMEs and other SMEs headquartered on the island of Ireland from a wide variety of investors.

217 deals were completed in 2024, similar to the previous year (216). “In view of global headwinds, we should be ambitious and aiming to double this,” added Ms Larkin.