Scale Ireland’s fifth annual report highlights persistent obstacles in investment, State supports and regulatory preparedness.
Ireland’s early‑stage technology companies are facing another tough year in the hunt for capital, according to new data from Scale Ireland’s 2026 State of Start‑ups Survey.
The findings coincide with Scale Ireland’s fifth Regional Start-up Summit which is taking place in Cork today (13 February).
Nearly three quarters of founders say raising private investment is “difficult” or “very difficult”, a level broadly unchanged over the past five years as venture funding conditions remain tight.
The survey, which gathered responses from 209 founders and chief executives, shows that 74.6% of companies struggle to attract private capital.
A similar proportion want to see part of Ireland’s pension savings channelled into domestic enterprises through venture and private funds. Many leaders say the lack of patient capital is undermining the country’s ability to build globally competitive firms.
The survey findings come hot on the heels of the most recent IVCA VenturePuls report which showed that venture capital investment in Irish technology SMEs fell last year for the first time since 2018. Total funding dropped 23% to €1.1 billion in 2025.
Mind the gaps
Speakers and delegates at the fifth Scale Ireland Summit in Cork.
Martina Fitzgerald, chief executive of Scale Ireland, said the findings reflect the biggest issues for start‑ups and scaling companies.
‘While funding remains the biggest issue for start-ups and scaling companies, there are also considerable and persistent problems with enterprise supports. They are far too complicated,” she warned.
“We need to ensure supports are being set up to promote use and and not solely to prevent abuse. Our survey also shows there is a significant lack of awareness about the EU’s new AI Act and how it will impact Irish start-ups – this needs to be addressed urgently.
The report also highlights how near‑universal adoption of artificial intelligence is being held back by limited regulatory understanding. Some 94.2% of founders are deploying or preparing to deploy AI tools, up more than six percentage points on last year.
Yet 35.4% say they are unaware of the new EU AI Act and 36.8% do not know what effect it will have on their business. Founders say the information gap risks exposing companies to compliance problems as the regulatory regime comes into force.
State supports continue to divide opinion. The Government’s revised KEEP share options scheme is still proving inaccessible for most start-ups.
Almost 89% of companies have not used it to hire or retain staff. Two in five say the system needs reform to make employee ownership a realistic incentive. By contrast, 48.3% view the government’s five percentage point increase in the R&D tax credit rate as positive, although more than half have not availed of the scheme.
Brian Caulfield, chair of Scale Ireland, said the results show that “while progress has been made in areas such as the R&D tax credit, other challenges for the sector are very persistent”.
He added that Irish start‑ups “remain hugely undercapitalised relative to US peers” and that greater incentives are required to attract angel investment and mobilise pension fund savings. He also called for urgent improvements to employee share ownership supports.
The role of non‑EU workers in the sector continues to grow. Almost 90% of respondents say immigration has had a significant or very significant positive impact on their companies and on the wider innovation economy. The survey also finds small gains in gender representation in leadership, with 61.7% of firms reporting a female founder or senior executive.
Progress is slower on sustainability commitments. The proportion of start-ups contributing to sustainability goals has fallen to 44.9%, while fewer than four in ten companies have a climate action plan in place.
Brian O’Connor, Senior Investment Director, Ireland Strategic Investment Fund; Martina Fitzgerald, CEO, Scale Ireland; Vanessa Hartley, Vice President, EMEA Large Customer Sales and Head of Google, Ireland; Brian Caulfield, Chair, Scale Ireland; Carol Gibbons, Divisional Manager at Enterprise Ireland
Despite the pressures, a significant minority remain optimistic about Ireland’s trajectory as a tech hub. Just under a third of founders believe the country is moving in the right direction to support companies with global ambitions. Two‑thirds say more decisive action is needed.
Scale Ireland, which has more than 800 members, says the results underline the urgency of reforms to strengthen the domestic start‑up ecosystem and ensure the country keeps pace with international competitors.
The Scale Ireland Summit in Cork this morning was supported by Google, the Ireland Strategic Investment Fund, Enterprise Ireland, Atlantic Bridge, Research Ireland, Net Feasa, Skillnet Ireland, Republic of Work and the Tyndall National Institute. Speakers and featured firms included Teamwork, Keelvar, NeuroBell, Net Feasa and Athena Analytics.
Top image: Taoiseach Micheál Martin, TD, with Scale Ireland CEO Martina Fitzgerald and Scale Ireland chair Brian Caulfield
-
Bank of Ireland is welcoming new customers every day – funding investments, working capital and expansions across multiple sectors. To learn more, click here
-
For support in challenging times, click here
-
Listen to the ThinkBusiness Podcast for business insights and inspiration. All episodes are here. You can also listen to the Podcast on:
-
Spotify
-
SoundCloud
-
Apple
