The amount of funding secured from venture capital firms by small and medium sized Irish business during the first three months of this year fell by nearly half, new figures show.
According to the Irish Venture Capital Association’s (IVCA) VenturePulse survey, just €258.5m was drawn down by SMEs from January to March, down 48% from the €502m in the same period last year.
But despite the disappointing drop, the IVCA said that over the last three quarters investment has held up well given the backdrop of global uncertainty.
“This quarter and the same period last year each included one exceptional deal above €100m,” said Denise Sidhu, chairperson of the Irish Venture Capital Association.
“If one excludes these two outliers then the decrease in Irish funding is in line with global trends which saw a 20% decline in the first quarter.”
The life sciences sector grabbed almost two thirds of the fund, during the period followed by envirotech which secured just under a fifth and software.
Largest deals included medical device company, Mainstay Medical, which received €115m and energy transition firm, GridBeyond, which secured €42m.
Resilience was shown by the very early-stage Irish firms, which raised €40m.
While funding was lower among most deal sizes, the trend was bucked by companies looking to raise €1m-€3m which enjoyed a positive first quarter.
Funding in this sector rose by 126% to €22.7m compared to €10m last year.
The value of deals among those raising €5m-€10m was up 3%.
“The Irish ecosystem for getting companies off the ground, including Government and state bodies such as EI and ISIF, is largely working well,” said Sarah-Jane Larkin, director general of IVCA.
“The big challenge is our over dependence on unpredictable international investors in taking these start-ups to the next level of growth.”
“In this regard, we welcome Minister Michael McGrath’s recent comments on the desirability of unlocking some of the €150 billion in domestic household deposits into more productive use for both the economy and for savers.”