Survey finds venture capital investment falls by more than two thirds
Venture capital funding into Irish technology SMEs in the third quarter fell by 38% to €190 million from €309 million in the same period last year, according to the Irish Venture Capital Association’s latest Venture Pulse survey.
The IVCA said the latest data “raised alarm bells” and that funding across almost most levels “fell significantly”.
“Following a strong first half, overall funding for the nine months to end September 2023 just about held up, with an increase of 6% to just over €1 billion, compared to the same period last year,” said Denise Sidhu, chairperson, IVCA.
“However, the Irish third quarter data raises alarm bells, as the value of deals across all sizes fell significantly, with the exception of those under €1 million.” She added that the number of transactions fell by over a quarter (26%) compared to the same period last year.
The value of deals in the third quarter in the €3-€5 million range which fell by over a third (34%) to €193.8 million compared to almost €300 million in the same time last year. The value of deals in the €5-€10 million range dropped by more than three quarters (76%).
Sarah-Lane Larkin, director general, IVCA, said that another worrying indicator was that the value of international VC investment in the third quarter fell by more than two thirds (69%) or by over €120 million.
“The reliance on international VC investors at a time when US venture capital and private equity investment has slowed significantly, emphasises the need for Ireland Inc to build local private funding sources in order to combat global dependence and headwinds.”
Sectors most successful in raising funding in the nine months to end September 2023 included envirotech or clean energy which raised €580 million (50% of total VC investment), followed by life sciences at €157 million; €92 million for software; € 88 million for AI & machine learning; and €82 million for fintech.