Irish tech firms raised an enormous half a billion euro in the first half of the year
However, early stage companies are still finding it tough to get cash.
IRISH TECH COMPANIES have bagged funding worth nearly half a billion euro in the first half of the year, a huge increase on 2015 when just over €300 million was raised.
That is according to the Irish Venture Capital Association’s (IVCA) VenturePulse survey, published today in tandem with William Fry.
The study found that Irish tech SMEs raised €249 million in the second quarter of 2016 and a record €486 million for the first half of the year overall.
This is a 58% increase compared to the first six months of 2015 when €307 million was raised.
Overall 2015 was itself a record year, so venture capital officials said it was positive that the strong performance is continuing.
IVCA chairman Michael Murphy said that “it is promising” to see the momentum from 2015 carried through into this year, and also highlighted the role of international investors.
International investors
According to the report, international syndicates devoted €89 million to Irish SMEs during the second quarter of the year, bringing the total raised in the first half of 2016 to €205 million.
This compares to investment by international syndicates of €142 million in the first half of 2015.
In addition, two companies this year raised capital of €98 million directly from international investors. One of these firms, Intercom, is based in San Francisco but was set up by four Irishmen five years ago and has a large presence in Dublin.
Murphy said: “The importance of good international relationships is once again emphasised by sustained strong support from international investors.
“(However), the Irish venture capital community continues to be the main source of funding for Irish innovative SMEs both through direct investment and as the local lead investor for international syndicate investors.”
The life sciences sector raised the most money, about two-fifths of the combined total, while companies in the software and fintech industries also performed well.
IVCA chairman Michael Murphy with director general Regina Breheny.
Early stage funding
However, businesses have had difficulty in sourcing seed funding over the past few years and this trend continued during the period. Just 7% of all the cash raised was classed as seed funding.
In the second quarter early stage companies received seed capital of just under €17 million, bringing the total raised during the six-month period to €41.5 million, or 8% of all funds raised.
This compares with €19 million, 6% of funds raised, in the first half of 2015, €6 million (3%) during the same period in 2014 and €34 million (21%) in 2013.
Although IVCA director general Regina Breheny acknowledged that this percentage continues to remain low, she expressed optimism that it will soon improve.
“A number of new seed funds are now up and running and we should begin to see some recovery in early stage investment,” she said.
