TLDR:
IVCA reports that funding for Irish SMEs in 2023 increased by 2% from the previous year, with a total of €1.35bn invested. However, funding for the fourth quarter saw a decline of 16% year-on-year to €204m. The data indicates a challenging year for firms seeking larger investment amounts, with a decrease in funding for companies in the €5m to €10m and €10m to €30m range. International backers played a significant role in funding Irish tech SMEs, accounting for two-thirds of the total investment. The sector breakdown for the year showed a strong focus on innovative tech companies, with sectors like Envirotech, life sciences, and software receiving the most funds.
Article Summary:
The Irish Venture Capital Association (IVCA) reported a 2% increase in funding for Irish SMEs in 2023, with a total of €1.35bn invested. However, funding for the fourth quarter experienced a decline of 16% year-on-year to €204m, indicating a challenging year for firms seeking larger investment amounts. The data revealed a positive trend for start-ups looking to raise less than €5m, while funding in the €3m to €5m range increased by 36% in the final quarter compared to the previous year. On the other hand, deals in the €5m to €10m and €10m to €30m range saw significant decreases in funding, highlighting the risk of indigenous firms facing challenges in their growth trajectory.
IVCA chairperson Denise Sidhu emphasized the importance of locally sourced scaling finance to support high potential firms. The report also noted a heavy reliance on international backers for scaling finance, with two-thirds of the total investment for 2023 coming from international sources. Envirotech accounted for 45% of total funds raised, followed by life sciences at 17% and software at 8%. The sector breakdown highlighted a focus on innovative tech companies, with artificial intelligence and machine learning representing a significant portion of the total funds raised. The data reflects a need for actionable recommendations to address the challenges faced by scaling firms and ensure sustainable growth in the Irish SME sector.
