2022 flattens out as Q4 venture capital fell sharply by 47% and “flight” by overseas investors saw a 73% nosedive in funding from global sources.
Venture capital investment into Irish tech firms and SMEs in 2022 totalled €1.33bn, no change on the previous year.
According to the Irish Venture Capital Association VenturePulse survey, in association with William Fry, fourth quarter funding fell sharply to €244.6m, down by 47% from €458.5m, compared to the same period 2021.
“The flight of international capital in the fourth quarter highlights Ireland’s exposure and the need to boost local sources of funding for scaling companies”
“Despite a flat year, venture capital funding in Ireland last year performed reasonably well compared to global venture capital (VC) trends in which funding in 2022 fell by 35% to $445bn,” explained Leo Hamill, chair, Irish Venture Capital Association.
“It should also be remembered that VC funding in Ireland in 2022 was still 43% ahead of 2020, despite all the global economic challenges and uncertainties faced last year.”
Hamill added, however, that the sharp falloff in Ireland’s fourth quarter was a cause for concern.
“Global trends were reflected in the fact that overseas VC investment in Ireland fell by 73% in the fourth quarter to €58.3m, from €214m in the same period last year. The flight of international capital in the fourth quarter highlights Ireland’s exposure and the need to boost local sources of funding for scaling companies.”
Seed funding still at starter’s marks
Sarah-Jane Larkin, director general, IVCA said that seed or first round funding to start-ups in 2022 showed little change, up by 1% to €132.2m from €130.7m in 2021.
However, seed funding fell by 18% in the fourth quarter to €40.2m, compared to €49.3m in the same period last year.
“Economic and geo political headwinds experienced last year highlight the importance of having active Irish seed funds in the local market, able to invest in a counter cyclical manner and ensure that great founding teams can build companies in Ireland even during a global downturn,” said Larkin.
Largest deals in 2022 included: Wayflyer €134m; Flipdish €94m; TransferMate €66m; Fonoa €62m; and Carrick Therapeutics €60m.
The top sectors raising funding in 2022 were fintech (23% of total); life sciences (21%); software (19%); and cybersecurity (8%).
Main image at top: Leo Hamill, chair, and Sarah-Jane Larkin, director-general, Irish Venture Capital Association