Venture capital funding falls by 41% to €197m in first quarter

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Venture capital funding falls by 41% to €197m in first quarterVenture capital funding to Irish technology firms fell by just over 40% to €196.8m in the first quarter of 2019 compared to €332m in the same period last year, according to the Irish Venture Capital Association VenturePulse survey published in association with William Fry.

But IVCA chairman Alex Hobbs said that the underlying trend was more positive. “Last year included two megadeals of €100m each for Intercom and AMCS. If you strip these out, then core growth across all deals in the first quarter was almost 50%.”

He said that activity in the market is reflected in the fact that 75 Irish companies received start up or following on funding compared to 43 in the same quarter last year.

Sarah-Jane Larkin, director general, IVCA, said that there was a strong rebound in seed funding to early stage firms, up 23% to €17.8m.

She added that there was also an increase in the number of smaller deal sizes in the €1m-€5m category which increased to 66 from 36 in the same quarter last year.

Life sciences and software dominated the overall figures with 47% and 33% of funds raised respectively. All five investments that exceeded €10m were in the life sciences sector. AI (Artificial Intelligence) & machine learning received 3%.

Sarah-Jane Larkin added, “Despite the overall fall in funding, the Irish venture capital community continues to be the main source of investment for Irish innovative SMEs both through direct investment and as the local lead investor for international syndicate investors who invested €112m or 57% of total funds raised in the first quarter 2019.”

Stephen Keogh, Corporate Partner, said "William Fry, which houses Ireland's leading venture capital legal practice, is proud to have advised on 60% of the deals where the identities of advisors were disclosed".

By Stephen Keogh of William Fry.