Irish tech companies fundraised a record €932m in the first half of 2021, as much as for the whole of some previous years, according to TechIreland.
One hundred and one (101) Irish tech companies raised a record €932m in the first half of the year from a spread of sources, including venture capital, debt finance, grants and crowdfunding.
The latest figures compiled by TechIreland in its Startup Funding Review showed how the headline figure is dominated by some very large rounds. The top 10 largest investments account for 70pc and the top five account for half the funding raised. LetsGetChecked raised €123 M, followed by GH Research (€105m) and Carne Group (€100m).
“While the overall numbers are good, we aren’t keeping up with the huge increase in European tech funding”
In just six months firms raised as much as for whole of some previous years.
There was an increase in the number of early stage rounds (35 companies each raised between €1m-to-€5m, up from 26 for the same period last year, while another 40 companies raised less than €1M, up from 25 last year).
Lagging behind Europe
However, in line with the Irish Venture Capital Association’s recent report, early stage rounds in Q2 fell sharply after a strong first quarter. Overall, the first six months show strong funding at all levels.
“While the overall numbers are good, we aren’t keeping up with the huge increase in European tech funding,” said John O’Dea, CEO of TechIreland.
“Ireland’s share for the first half of the year has actually dropped from 3.5pc to just 1.8pc.
Enterprise Ireland did much of the heavy lifting at the early stage with sterling pre-seed and seed funding support. “The first half of 2021 has seen plenty of entrepreneurial resilience in what remains a difficult market,” said Niall McEvoy of Enterprise Ireland.
“Exciting new opportunities have emerged in cybersecurity, privacy, big data and digital health. The overriding theme has been digitisation of business via SaaS business models.
As in previous years, the HealthTech sector accounted for a lion’s share of the total – 27 companies raised €439m, up 80pc on the same period last year. Mainstay Medical raised €130m. Galway based Neurent Medical raised €20m and 15 other HealthTech companies raised €1m-to €8m.
Fintech was another big winner. 13 FinTech’s raised €205 M, a 170pc increase on last year. The sector has seen some significant developments with Fenergo achieving unicorn status and Taxamo’s acquisition by Vertex.
As in previous years, Enterprise Solutions saw the greatest number of companies raising funding. 31 companies raised €126m, up 17pc on last year. Other winners were SaaS businesses (€97m) and medical devices (€176m).
Unsurprisingly, there was a dramatic decline in funding for TravelTech and, somewhat surprisingly, also a decline in CleanTech and artificial intelligence.
“The big increase in funding came from late stage deals,” explained Brian Caulfield, chair of Scale Ireland. “Early stage saw much more modest increases. As always, the headline figures conceal some less-welcome trends. It could be said of H1 2021 that, like the curate’s egg, parts of it were excellent”.
While the first half of the year has seen record levels of funding for Irish tech, the report also underlines some key concerns.
“Overall, Irish venture financing has got off to a barn-storming start in 2021. However, we need to ensure that early-stage companies get access to more of the investment they need”
There is a regional imbalance in funding – Dublin companies took in 82pc of the total. Investment going to companies outside Dublin declined from 26pc to just 17pc.
However, there were some notable regional successes; Meath-based Utmost raised €17.5m, Limerick’s Kneat raised €15m, Wexford based Scurri raised €6m. And Northern Ireland had one of its largest investment rounds to date. Belfast start-up Cumulus Neuroscience raised €6.9m. Altogether, 14 Northern Ireland-based companies raised a total €27m.
TechIreland said it was depressing to see that funding for companies with female founders declined from 11pc to just 6pc of the total.
Despite this, there are some really promising companies among the twenty female-led tech businesses that raised investment.
“Attracting significant mobile capital is a strong endorsement of the quality of Irish companies and reflects a global interest in them,” said Sarah-Jane Larkin of the Irish Venture Capital Association.
“However, reliance on this type of highly mobile capital is risky – we need more availability of long-term finance for our growing innovative firms.”
“Overall, Irish venture financing has got off to a barn-storming start in 2021,” added Elaine Coughlan from Atlantic Bridge.
“However, we need to ensure that early-stage companies get access to more of the investment they need.”