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VC funding into Irish SMEs falls by almost 40% to €190m in third quarter

Written by Robert McHugh, on 28th Nov 2023. Posted in Ireland

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Venture capital funding into Irish technology SMEs in the third quarter fell by 38% to €190m from €309m, in the same period last year, according to the Irish Venture Capital Association in its Venture Pulse survey, published this month in association with William Fry.  

Largest deals in the third quarter were Ocuco (Software) with €60m, Shorla Oncology (Life Sciences) with €32m, UrbanVolt (Environment) €26m and ProVerum (Life Sciences) with €15m.

Sectors most successful in raising funding in the nine months to end September 2023 included Envirotech or clean energy which raised €580m or 50% of total VC investment, followed by Life Sciences at €157m (14%), Software €92m (7.9%), AI & machine learning €88m (7.6%), and Fintech €82m (7%).  

'Alarm Bells'

“Following a strong first half, overall funding for the nine months to end September 2023 just about held up, with an increase of 6% to just over €1 billion, compared to the same period last year,” commented Denise Sidhu, chairperson, Irish Venture Capital Association.

“However, the Irish third quarter data raises alarm bells, as the value of deals across all sizes fell significantly, with the exception of those under €1m.”

Sidhu added that the number of transactions fell by over a quarter (26%) compared to the same period last year.

Value Of Deals 

As an example, Sidhu pointed to the value of deals in the third quarter in the €3-€5m range which fell by over a third (34%) to €193.8m compared to almost €300m in the same time last year. 

The value of deals in the €5-€10m range dropped by over three quarters (76%).

Worrying Indicator

Sarah-Lane Larkin, director general, IVCA, said that another worrying indicator was that the value of international VC investment in the third quarter fell by over two thirds (69%) or by over €120m.  

“The reliance on international VC investors at a time when US venture capital and private equity investment has slowed significantly, emphasises the need for Ireland Inc to build local private funding sources in order to combat global dependence and headwinds,” said Larkin.

Source: www.businessworld.ie

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