Venture funding for Irish tech firms surges in first quarter

Hopes that first quarter increase is a harbinger of recovery for early-stage funding in 2021 
Venture funding for Irish tech firms surges in first quarter

Cybersecurity firms saw the level of investment increase by €21.9m or 9%.

Venture capital funding for Irish technology firms has shaken off any restrictions caused by the Covid-19 pandemic.

The sector recorded an 8.9% increase to €249.4m in funding for the first three months of 2021, up from €228.9m in the same period last year.

Deals of less than €1m grew by 53% to €12.9m compared to €8.4m in the same period last year. The number of deals in this category rose by 55% to 34 from 22.

Chairperson of the IVCA Gillian Buckley said funding to start-ups and early-stage indigenous companies last year fell by almost a third.
Chairperson of the IVCA Gillian Buckley said funding to start-ups and early-stage indigenous companies last year fell by almost a third.

The figures were compiled for the Irish Venture Capital Association's (IVCA) VenturePulse survey published in association with William Fry.

The data covers equity funds raised by Irish SMEs and other SMEs headquartered on the island of Ireland from a wide variety of investors.

“Funding appears to have shaken off any restrictions caused by Covid-19,” Gillian Buckley, chairperson of the IVCA said.

“This is reflected in the fact that the number of deals increased by 65% to 74, compared to 48 in the same quarter last year, largely driven by a welcome recovery in early-stage funding.” 

She pointed out that funding to start-ups and early-stage indigenous companies for the 12 months last year fell by almost a third. 

We hope the more positive outcome in the first quarter is a harbinger of recovery for early-stage funding in 2021.

The first quarter 2021 bounce back in start-up and early-stage funding is reflected in the fact that deals in the €1 to €5m category jumped by 84% to €70.3m from €38m, while the number of transactions nearly doubled from 18 to 33.

“Government support for start-ups and early-stage companies through Enterprise Ireland and the Ireland Strategic Investment Fund is beginning to show a real impact,” Sarah-Jane Larkin, director general, IVCA said. 

“Without this, it is unlikely we would be seeing the growing importance of sectors such as life sciences to the Irish economy.” 

Life sciences accounted for €130m or over half (52%) of funding in the past quarter driven by an €89m round for Mainstay Medical. 

The next highest category was software at €46.7m (19%) followed by cybersecurity €21.9m (9%).

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