Ireland managed to buck global headwinds with a robust Q1 for venture capital funding thanks to one exceptional deal, but fundamental problems remain.
Venture capital funding into Irish SMEs rose by almost a third (32%) to a record €502m in the first quarter of 2023.
This is compared with €380m in the same period last year, according to the latest Irish Venture Capital Association VenturePulse survey.
“In the context of a global slowdown in VC investment, the high level of international funding secured by Irish companies clearly demonstrates a strong appetite for innovative indigenous enterprises”
However, the record quarter was driven by a €300m deal by Cork headquartered energy company Amarenco in March.
Globally, venture capital levels have plummeted drastically.
Bucking the trend
“This was a robust quarter for Ireland when compared to global VC funding which fell by 53% in the first three months of the year,” explained Leo Hamill, chairperson, Irish Venture Capital Association.
“While Amarenco boosted the figures, if you exclude deals above €30m in first quarter 2023 and 2022, this year still saw a rise of 70% to over €200m for the first three months, which reflects well in view of global headwinds across the sector.”
Hamill said that funding above €3m performed well with significant increases across all deal sizes. However, he cautioned that start-ups looking for seed and early stage funding experienced some choppy waters.
The value of deals in the €1m-€3m range fell by two thirds to €10m. Deals below €1m fell by 28% to €6.5m. Seed capital dropped 67% to €7.5m.
Sarah-Jane Larkin, director general, IVCA said that investment by international venture capital companies into Ireland represented 40% of the total in the first quarter.
Excluding larger rounds above €30m, international funding is up 210% on the same period last year.
“In the context of a global slowdown in VC investment, the high level of international funding secured by Irish companies clearly demonstrates a strong appetite for innovative indigenous enterprises which reflects their high quality and realistic valuations.”
She added that overall a healthy 21 indigenous companies raised between €5m and €30m in this quarter.
Apart from Amarenco, top deals in this period were Fire1 (€27.3m) and Supernode (€16m). Assure Hedge, Astatine and Neuromod each raised €15m.