TLDR:
- Irish tech funding reached a record high of €1.35bn in 2023 but dropped significantly in Q4.
- Overall, investment in Irish SMEs increased by 2% over the previous year.
According to the Irish Venture Capital Association (IVCA), funding for Irish tech companies saw a significant increase in the first half of 2023, reaching over €963m. However, the second half of the year saw a sharp decline in funding, dropping to €394m. IVCA Chair Denise Sidhu noted that this decline is in line with a global decrease in VC funding.
The report highlighted mixed fortunes for companies at different stages, with smaller start-ups faring better than those seeking larger investments. Deals in the €5-10m range fell by 26% over the year and dropped by 100% in the last quarter. Similarly, deals in the €10-30m range decreased by nearly half.
Despite these challenges, there were positive signs in the funding landscape. Investment in the €3-€5m range increased by 36% in the final quarter, while deals in the €1-3m category grew by 170%. The report also identified the top five deals in the last quarter, which were led by companies such as EasyGo, Luma Vision, and Cloudsmith.
One concerning trend highlighted by the report is the over-reliance on international backers for scaling finance. International funding into Irish tech SMEs accounted for two-thirds of the total funding in 2023, with €745m flowing into eight companies. Despite this, artificial intelligence and machine learning sectors saw significant growth in funding, representing 7% of the total investment.
Overall, while Irish tech funding reached record highs in 2023, the drop in Q4 signals a challenging landscape for companies seeking larger investments. IVCA is urging for more locally sourced scaling finance to support the growth of indigenous firms in Ireland.
