TLDR:
- Venture capital funding for Irish SMEs rose by 2% in 2023, totaling €1.35bn.
- Funding in the fourth quarter dropped by 16% compared to the same period in the previous year.
Venture capital funding for Irish small and medium-sized enterprises (SMEs) increased by 2% in 2023, reaching a total of €1.35bn. However, the second half of the year saw a significant decline in funding, with a 16% decrease in the fourth quarter compared to the same period in the previous year. The Irish Venture Capital Association (IVCA) reported that the first half of 2023 showed strong investment, with €963m raised, but the second half experienced a marked decrease, with only €394m invested.
Start-ups seeking funding under €5m performed better than those looking for larger investment rounds. Funding in the €3m-€5m range increased by over a third in the final quarter of 2023 compared to the same period in 2022, while the €1m-€3m category saw a growth of 170% and those under €1m rose by 8%. However, funding in the €10-€30m range decreased by almost half to €208m for the year, with a similar decline in the final quarter to €30m compared to 2022.
According to IVCA chairperson Denise Sidhu, the data highlights the risk for innovative indigenous firms facing challenges in scaling due to a lack of locally sourced finance. International funding accounted for two-thirds of the total investment in Irish tech SMEs in 2023, indicating continued reliance on overseas financing. Envirotech, life sciences, and software industries received substantial funding, with the AI and machine learning segment experiencing rapid growth.
