Tech funding slumps 48pc in first quarter

The amount of venture capital funding into tech and life sciences companies has fallen sharply in the first three months of the year

Venture capital funding for start-ups and tech companies has fallen sharply in Ireland, according to new industry figures.

Cash to fund tech firms sank by 48pc to €259m in the first three months of the year, compared with €502m during the same period in 2023.

The fall, which is partly caused by a drop in international venture capital coming into Ireland, echoes a similar slump in venture capital to tech companies around the world, which was down around 20pc in the first quarter compared with the same time last year.

The figures were published by the Irish Venture Capital Association (IVCA) in association with William Fry.

The biggest individual deals in the three months were Mainstay Medical (€115m) and GridBeyond (€42m). A number of notable smaller deals include Halo Technologies (€18.4m), Mybronics (€15m) and Cumulus Neuroscience (€13m).

However, early and seed stage funding deals rose, overall, with very early stage start-ups raising €40m and companies attracting between €1m and €3m more than doubling in deal value.

Overall, the life sciences sector snagged almost two thirds of all the VC funding cash available, while software came in at a comparatively lowly 9pc.

“Despite this fall, investment in the last three quarters has held up well against a backdrop of global uncertainty,” said Denise Sidhu, chairperson of the IVCA.

“This quarter and the same period last year each included one exceptional deal above €100m. If one excludes these two outliers then the decrease in Irish funding is in line with global trends which saw a 20pc decline in the first quarter.”

The IVCA says that it wants regulatory and legislative change in Ireland to allow more of Ireland’s household deposits to be used in venture.

“The Irish ecosystem for getting companies off the ground, including Government and state bodies such as Enterprise Ireland and the Irish Strategic Investment Fund, is largely working well,” said Sarah-Jane Larkin, director general of the 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 €150bn in domestic household deposits into more productive use for both the economy and for savers.”

Ms Larkin said international funding into Irish SMEs in the first quarter fell by 57pc to €184m from €425m last year.

Reporting on:independent.ie