Irish SME venture capital funding fell 10% to €578.4m in H1 2026, while international investors accounted for 82% of deals, says IVCA.
Venture capital investment into Irish SMEs reached €578.4 million during the first half of 2026, representing a 10% decline compared with the same period last year, according to the latest VenturePulse survey from the Irish Venture Capital Association (IVCA), published in association with William Fry.
While the overall first-half figure was lower year-on-year, activity accelerated significantly during the second quarter, with funding increasing by more than 200% to €356.7 million. However, that comparison comes against the backdrop of the weakest second quarter in a decade recorded in 2025.
“Just two frontier AI companies, Anthropic and OpenAI, sucked up 43% or $217 billion of global start-up funding in the first half”
The survey points to a funding environment increasingly reliant on international investors, who accounted for 82% of total investment during the first six months of the year and 80% of funding in the second quarter.
Irish venture capital Q2 and H1 explainer
| Question | Answer |
|---|---|
| What is the IVCA VenturePulse report? | VenturePulse is the Irish Venture Capital Association’s survey of venture capital investment activity in Irish SMEs, published in association with William Fry. |
| How much venture capital funding did Irish SMEs raise in H1 2026? | Irish SMEs secured €578.4 million in venture capital funding during the first half of 2026. |
| How did funding change compared to the previous year? | Funding declined by 10% compared with the first half of 2025. |
| How much funding was raised in Q2 2026? | Venture capital investment reached €356.7 million during the second quarter of 2026. |
| What proportion of funding came from international investors? | International investors contributed 82% of total funding in H1 2026 and 80% in Q2 2026. |
| Why is the IVCA concerned about international investor reliance? | The IVCA believes Ireland’s startup ecosystem is becoming overly dependent on overseas capital, increasing exposure to global economic and geopolitical risks. |
| What global trends could affect Irish venture capital funding? | Geopolitical instability and the concentration of investment in large US AI companies may reduce the availability of international capital for Irish startups. |
| How much global startup funding went to Anthropic and OpenAI? | Anthropic and OpenAI attracted 43% of global startup funding, equivalent to approximately $217 billion, in the first half of 2026. |
| What happened to funding rounds below €5 million? | All deal categories below €5 million recorded declines during the first half of 2026. |
| How did €3m to €5m deals perform? | Investment in deals valued between €3 million and €5 million fell 58% to €21.5 million. |
| What happened to seed funding? | Seed funding, representing first rounds for startups and SMEs, fell 23% to €50 million. |
| Were any deals completed in the €10m to €30m range in Q2 2026? | No deals in the €10 million to €30 million range were recorded during the second quarter. |
| Which sectors attracted the most funding? | Life sciences and fintech were the leading sectors, each accounting for 26% of total investment. |
| Which sectors were the next strongest performers? | Cybersecurity and software businesses each accounted for 14% of funding. |
| How much funding went to AI and machine learning companies? | AI and machine learning companies represented 7% of total venture capital funding in H1 2026. |
| What is the IVCA’s view on Ireland’s AI sector? | The IVCA says AI is embedded across most VC-backed Irish SMEs and that Ireland does not need to produce frontier AI platform companies to benefit from the technology. |
| Which company raised the largest funding round in Q2 2026? | Fintech company Fonoa raised €94.4 million. |
| Which cybersecurity company secured a major funding round? | Cloudsmith raised €61.5 million during Q2 2026. |
| How much funding did CameraMatics raise? | CameraMatics secured €49 million in funding. |
| How much funding did Manna raise? | Drone delivery company Manna raised €43 million. |
| How significant were the Fonoa and Cloudsmith deals? | Together, the two companies accounted for almost 44% of all Irish venture capital investment recorded in Q2 2026. |
| What does the report suggest about the Irish funding market? | The market remains heavily influenced by a small number of large deals and continues to rely substantially on international investors for capital. |
| Which sectors are currently attracting the strongest investor interest in Ireland? | Life sciences, fintech, cybersecurity and software companies are attracting the largest share of venture capital investment. |
| What is the key takeaway from the VenturePulse report? | Irish venture capital investment remains active, but declining early-stage funding and heavy dependence on overseas investors present challenges for future capital formation. |
Geopolitical tensions impact innovation and ambition
Richard Watson, chair of the IVCA, said the figures underline Ireland’s dependence on overseas capital.
“The lack of any deals in the €10 million to €30 million range in the second quarter highlight the extent to which the dearth of domestic sources of funding is limiting capital formation”
“International investment as a percentage of the total reached 82% for the first half and 80% for the quarter. These levels are flashing red warning signals as they represent some of the highest on record and emphasise our over exposure to overseas investors.”
Watson said a combination of geopolitical tensions and shifting global investment priorities could influence future funding flows into Ireland.
“Just two frontier AI companies, Anthropic and OpenAI, sucked up 43% or $217 billion of global start-up funding in the first half.”
He also pointed to continuing geopolitical instability, including the conflict involving Iran, as a factor that could affect international venture capital activity.
Early stage struggles worsen
The report highlights challenges for companies seeking funding at earlier growth stages. According to Sarah-Jane Larkin, director general of the IVCA, every funding category below €5 million declined during the first half of the year.
“This and the lack of any deals in the €10-30m range in the second quarter highlight the extent to which the dearth of domestic sources of funding is limiting capital formation, even with the support of the Seed & Venture Capital Scheme.”
Deals valued between €3 million and €5 million fell sharply, dropping 58% to €21.5 million from €50.7 million in the same quarter last year. Seed funding, representing first investment rounds for SMEs, declined by 23% to €50 million.
Sectoral data shows life sciences and fintech companies led fundraising activity during the first half of 2026, with each sector accounting for 26% of total investment. Cybersecurity and software businesses followed, each representing 14% of funding secured.
Artificial intelligence and machine learning companies accounted for 7% of overall investment during the period. Larkin said the figure should be viewed in the context of Ireland’s broader innovation ecosystem.
“This does not mean we are being left behind in AI. It is unrealistic to expect a small nation like Ireland to produce the giant platform and frontier AI leaders of the US. But AI is now embedded in the products and services of the vast majority of local VC backed SMEs.”
Several large transactions shaped second-quarter performance. Fintech company Fonoa secured €94.4 million, while cybersecurity firm Cloudsmith raised €61.5 million. Together, the two companies accounted for almost 44% of total venture capital investment recorded during the quarter.
Other significant deals included a €49 million funding round for SaaS provider CameraMatics and €43 million raised by drone delivery company Manna.
The findings suggest that despite strong fundraising by a number of high-growth Irish technology companies, the market remains heavily influenced by a small number of large transactions and a continued reliance on international investors to support venture capital activity.
Image at top: IVCA director-general Sarah-Jane Larkin and chair Richard Watson
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