Venture capital funding hits near record in second quarter of the year

Irish small and medium-sized firms saw venture capital funding reach a near record €494 million in the second quarter of the year, new figures from the Irish Venture Capital Association (IVCA) indicated.
But while seed funding remained “robust” the VenturePulse survey pointed to a gap in funding for deals under €10 million, and overall funding for the first half of the year was down by 22 per cent to €752.7 million. Venture capital funding into Irish SMEs falling by 48 per cent fall in the first quarter of 2024 to €258.5 million. That offset the 7 per cent rise recorded in the second quarter.
The life sciences sector raised the most during the six months at €297 million or almost 40 per cent of the total raised. That was followed by envirotech at 13 per cent, regtech at 12 per cent, and fintech and software at 9 per cent each. Despite the hype over the technology AI and machine-learning deals only accounted for 4 per cent of the total raised during the six-month period.
Seed funding rose by 79 per cent to €93.6 million in the first half of the year, with the figures rising 18 per cent to €53.2 million in the second quarter.
“It suggests that companies are doing well raising early-stage seed funding but are struggling to kick on in the next vital growth phase,” said Gerry Maguire, chairman of the Irish Venture Capital Association.
However, other areas looked less robust. Deal in the under €1 million category were down 20 per cent in the second quarter, while the €1 million to €3 million deals declined by 21 per cent and €3 million to €5 million fell by 10 per cent in the three-month period.
Deals in the €5 to 10 million range were down by 44 per cent year-on-year in the second quarter, indicating a “worrying trend”, according to the IVCA.
Meanwhile, more than 90 per cent of the funding for deals above €10 million was sourced from international investors, with deals in this category including a €70.3 million investment in life sciences firm SynOx Therapeutics, fintech company AccountsIQ’s €60 million deal, and cybersecurity specialist Tines with a €50 million deal. Corlytics also had a major deal during the period but the precise value was not disclosed.
Mr Maguire said the reliance on overseas investors highlighted the need to increase the availability of growth finance from local sources. “This is a testament to the quality and ambition of Irish companies, but points to the importance of having Irish funds of scale that can co-invest or lead these rounds.”
Director general of the IVCA Sarah-Jane Larkin said recovery in seed funding had continued to hold up largely thanks to Government policies designed to bolster early-stage funding. “While seed funding remains robust the IVCA is looking forward to the report of the implementation committee set up by Peter Burke, Minister for Enterprise, Trade & Employment, on measures to assist these exciting high-potential start-ups take their next steps through greater access to scaling finance,” she said.
The Irish Venture Capital Association VenturePulse survey is compiled from information supplied internally by members of the IVCA and from published information where the funding included non-IVCA members.