TLDR:
- Venture capital funding for Irish SMEs reached €494 million in the second quarter of the year.
- Seed funding rose by 70% over the first six months of 2023.
Irish small and medium-sized firms received nearly record-breaking venture capital funding of €494 million in the second quarter of the year, according to the Irish Venture Capital Association. While seed funding showed significant growth of 70% over the first six months of 2023, there was a noted gap in funding for deals under €10 million. The overall funding for the first half of the year decreased by 22% to €752.7 million, with a 48% fall in the first quarter offsetting a 7% rise in the second quarter.
The life sciences sector saw the largest amount of funding in the first half of the year, garnering €297 million or nearly 40% of the total raised. Other sectors receiving significant funding included envirotech, regtech, fintech, and software. However, deals in the under €1 million category and the €1 million to €10 million range declined in the second quarter, indicating potential challenges for companies in accessing growth finance.
International investors played a significant role in funding deals above €10 million, with more than 90% of the funding sourced from overseas. This reliance on foreign investors highlights the need for local sources of growth finance, according to the Irish Venture Capital Association. The recovery in seed funding has been attributed to Government policies aimed at bolstering early-stage funding, with hopes for greater access to scaling finance for start-ups in the future.
Overall, the VenturePulse survey reflects a mix of positive growth and challenges in the venture capital landscape for Irish SMEs. Seed funding has shown strength, but there is a need to address the gap in funding for mid-sized deals, especially in the €5 to €10 million range.
