Early stage firms benefit as VC funding rises again
Venture capital funding to Irish firms rose by 19% to €231m in the three months to the end of September, according to the Irish Venture Capital Association’s latest VenturePulse survey.
The figures also show a renewed interest among investors in start-ups companies, following a sharp drop in early stage investments last year.
The overall in funding in the most recent quarter means that €872m has been raised by Irish SMEs in the nine months to September, an increase of 11% on the same period of 2020.
Some of the biggest deals in the third quarter include the €23m raised by Northern Ireland-based recycling firm National World Products.
Software firm Ekco also raised €20.25m in funding in the period.
However some of the biggest increases in funding were seen at the lower end of the scale, with a 63% rise in seed funding during the quarter.
This tends to represent the first investments secured by early stage firms, with start-ups here taking a combined €31m in seed funding during the quarter.
Meanwhile the overall value of deals in the €1m to €5m range jumped by 89% to €76m.
“In the early stages of the pandemic, many venture capital companies looked to back their existing investments and well established companies,” said IVCA chairperson Nicola McClafferty. “Having managed that, there is a renewed appetite to focus on opportunities in early stage companies.”
IVCA director general Sarah-Jane Larkin said the recent Budget also featured elements that would be good news for Irish firms attempting to fundraise in the future.
“The planned €90m innovation fund, due to be launched early next year and focused entirely on early stage enterprises, should have a really positive impact on new and emerging companies,” she said. “One consequence of the pandemic is increased interest in entrepreneurs and tech firms which have ideas relating to health as well as the digital economy.”