Irish tech firms raise record €963m in first six months

The huge venture capital haul was boosted by three massive individual deals for local energy infrastructure firms Amarenco (€300m), Jolt (€150m) and Weev (€58m)

Irish startups and tech companies raised more money in the first six months of this year than during any similar period previously, new figures suggest.

In total, €963m was raised by Irish tech and ‘clean tech’ firms, and other tech firms headquartered on the island of Ireland.

Although over half of the money came from three individual energy infrastructure deals, the figures suggest that Ireland was an outlier for the amount of money raised, as international venture capital recovers from a slump.

“Ireland well outperformed global trends,” said Denise Sidhu, chairperson, chairperson of the Irish Venture Capital Association, which compiles the figures from a variety of investors.

“VC investment worldwide fell by over 50pc in the first half and by almost 50pc for the second quarter.”

Overall, the figures represent a huge rise in venture capital here. The Irish industry exceeded €1bn in VC funding for the first time in a calendar year in 2021. Two years later, it is on track to almost double that investment.

However, the numbers are being treated with caution by investors, who say that they are reliant on a few very large transactions and international funders.

“If you exclude deals over €30m, investment fell by 52pc for the second quarter compared to last year and by 16pc for the half year,” said Ms Sidhu.

She also said that international investors accounted for 82pc, or €785.4m, of total venture capital investment in Ireland in the first half of 2023, and 78pc, or €360.5m, for the second quarter.

“The value of international investment in the first half has risen from 58pc of the total last year to over 80pc in 2023,” she said.

“As in the case of foreign direct investment, there is a high risk of over-dependence on mobile international capital. We need to put in place alternative sources locally.”

The IVCA figures sit in stark contrast with numbers put out by TechIreland earlier this month, suggesting that funding had fallen 40pc to €460m, less than half the IVCA’s figure.

The difference in the two organisations’ set of figures comes almost wholly from different decisions on whether to include the cash from three individual giant deals for energy infrastructure firms — Amarenco (€300m), Jolt Energy (€150m) and Weev (€58m).

All three are Irish firms, headquartered here. However, much of the capital raised will be deployed outside Ireland.

While the IVCA treats these three deals as legitimately part of the industry’s record here, TechIreland is understood to believe that they don’t represent investment into the Irish tech ecosystem in a similar way to other deals recorded.

The lower figure is also considered helpful to organisations such as Scale Ireland, which is seeking additional fiscal measures and reliefs from the government to stimulate tech investment here.

In its half-yearly report last week, TechIreland nevertheless noted that the achievement of the three cleantech firms was “impressive”.

According to the IVCA, the three big energy deals helped cleantech hoover up 57pc, or €550.5m, of the total VC investment, followed by life sciences at 10pc, or €92.2m.

For the first time, artificial intelligence companies were in the top three sectors for the first half, raising €83m or 9pc of the total.

Reporting On: www.independent.ie