Irish venture capital investment falls 80% during second quarter

It follows a global trend as investors show more caution due to tariffs

Between April and June, 20 deals were agreed. File photo

Venture capital investment into Ireland saw a considerable decline during the period April to June, with 20 deals closing valued at a total of $136.4m (€116.5m), down around 80% when compared to the first quarter this year.

According to the latest Venture Pulse report from professional services firm KPMG, Irish venture capital investment fell sharply as the country follows a global trend with investors showing more caution due to tariff uncertainty.

Between January and March, KPMG recorded 28 deals valued at $668m. This was largely driven by three major deals that each exceeded the $100m mark.

Partner at KPMG, Gavin Sheehan, said after a strong start to the year “we are experiencing a slowdown in venture capital investment while investors await greater certainty at a macro level particularly in respect of US tariff policy”.

“Irish start-ups, particularly in the fintech space, have continued to successfully raise capital during the quarter and we continue to see growing interest in start-ups developing AI-led solutions, particularly where applications drive industry-specific solutions.” 

Venture capital investment across Europe held steady during the quarter at $14.6bn, down from $16.3bn at the start of the year. However, the deal volumes dropped from 2,358 to 1,733.

Meanwhile, global venture capital investment fell from $128.4bn across 9,314 deals during the first quarter to $101.05bn across 7,356 deals during the second quarter.

Mr Sheehan said that investor sentiment and outlook “remains cautiously positive” for the second half of the year “in part because Ireland's venture capital ecosystem has a strong focus on software companies, which have less direct exposure to US tariff risks”. 

He also cited the “strength of Ireland’s innovation ecosystem” and the “positive valuations” that have been garnered by Ireland-based start-ups in recent months, as a reason for this positivity.

Fintech report

In a separate report, Pulse of Fintech, KPMG said financial technology firms continued to attract a significant amount of investment during the first half of the year with NomuPay raising $77m, Wayflyer raising $35m, and IMPT raising $30m respectively.

In total, 13 fintech deals closed in Ireland between January and June worth $173m, an increase from the $140.8m across 10 deals seen during the same period last year.

Head of financial services at KPMG Ireland, Ian Nelson, said while the first half of the year “posed challenges for the global fintech sector, with ongoing geopolitical instability, Ireland has proven resilient”.

“There is clear enthusiasm here for innovative business models and emerging technologies, and we anticipate this positive momentum to carry on through the rest of the year.” 

Global fintech investment saw the softest six-month period since the first half of 2020, with just $44.7bn in investment across 2,216 deals.

At the sector level, digital assets, AI, and regtech were all trending well ahead of 2024’s investment levels at mid-year. Digital assets had $8.3bn in investment between January and June, compared to $10.7bn during all of 2024, while AI saw $7.2bn in investment — compared to $8.9bn in all of 2024.

The Europe, Middle East, and African region was the only major region to see fintech investment grow — to $13.7bn across 759 deals from $11.1bn across 780 deals during the same period in 2024.