€10m for Munster firms as Venture Capital funding sees 41% jump despite Covid-19

The Irish Venture Capital Association have suggested that the figures don’t reflect the challenges facing start-ups in the current climate

Dr Fiona Edwards Murphy, CEO and Co-Founder ApisProtect. Picture: Michael Mac Sweeney/Provision

Two Munster firms successfully raised €10m in venture capital funding last quarter, as overall VC funding for Irish companies jumped 41% despite the Covid-19 crisis.

Limerick family business BHSL Hydro, which has developed a technology for poultry farmers to generate power from waste, raised a further €8.5 million last quarter to bring the total investment to date to nearly €40m for the Ballagh-based business.

ApisProtect, based in Bishopstown, Co Cork, were also successful, raising funds of €1.5m for their business which uses innovative technology to help beekeepers prevent losses and increase productivity in their hives.

Despite the Covid-19 pandemic, overall, venture capital funding into Irish SMEs increased by 41% in the third quarter to €192.8m, compared to €136.4m last year.

This follows a record second quarter this year when funding increased by 58% to €363.8m.

Funding for the first nine months of the year rose by 39% to €785.7m from €566.3m in the same period last year.

Commenting on the resilience of VC funding in the face of Covid-19, Gillian Buckley, Chairperson of the Irish Venture Capital Association (IVCA) said, “We may be seeing a continuation of the trend in the second quarter when VC firms looked to up their investment in existing portfolio companies to overcome the threats caused by the pandemic and help them through the next 12-24 months.” 

Ms Buckley said the overall performance on funding this year might be partially due to the structure of the VC industry in Ireland.

“High tech companies account for approximately 90% of VC funds raised in Ireland in recent times."

"Tech firms, from fintech to life sciences and software-as-a-service, have certainly faced Covid-19 challenges but are probably less impacted than in many other sectors," she said. 

However, the IVCA have warned that the figures don’t reflect the challenges facing start-ups in the current climate.

Sarah-Jane Larkin, Director General Irish Venture Capital Association has suggested the figures don't reflect the challenges facing start-ups. Photo Chris Bellew / Fennell Photography

IVCA Director General Sarah-Jane Larkin said deals in the €1-5m range fell by 20% to €40.6m from €50.5m compared to the same quarter last year. Deals of less than €1m were down 7% in this quarter, and down 15% year to date to €32.3m from €38m.

And while seed funding did rise slightly in this quarter to €18.9m from €17.3m, Ms Larkin said it was not in line with the market in general (9% rise versus 41% increase overall).

So far this year, life sciences have accounted for over a third (35%) of total funding at €282m followed by software at €192m (24%).