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DateWednesday, September 16, 2015

VC Funding on Rise for Irish Tech

IVCA VenturePulse Survey Reports 45% Increase in VC Funding But Early Stage and Seed on the Decline



150916_ Irish_Venture_Capital_Association_Brian_Caulfield.jpgIrish technology companies raised €307m in the first half of 2015, 45% ahead of the same period last year, say the Irish Venture Capital Association VenturePulse survey. €187.1m was raised in the second quarter alone according to the study.



According to newly appointed IVCA chairman, Brian Caulfield (pictured), a major explanation for the growth was the creation of a pool of venture capital for later stage development and expansion. "There is a positive impact on the SME funding landscape resulting in investment of €51m in the second quarter alone, which is a terrific result considering that the venture capital industry in Ireland is currently in fundraising mode."



He added; "With continued strong support from international players growth/expansion funding was 96% of total funds raised in the second quarter. 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 syndicates who invested €79m in the second quarter and a total of €142m in the first half of 2015. Most of the Irish companies that raised funds from international investors had initially raised capital from Irish VCs."



Regina Breheny, director general, IVCA, said that the figures reflected positive international interest in the quality of Irish technology firms which, however, were highly mobile. "It is thus essential that the Government addresses in the next budget the major personal and capital tax imbalances between Ireland and the UK in terms of encouraging entrepreneurs and start ups."


But whilst the VC funding looks healthy, the VenturePulse study also found that first round seed funding remained low at €7.6m, 4% of total funds raised in the second quarter, showing that the seed funds supported by the banking sector and Enterprise Ireland's Seed & Venture Capital Programme of 2006-2012 are close to being fully invested, with just €7.6m invested in Q2, the lowest quarterly activity since the creation of these funds.


"The Government has recognised that these funds need to be renewed if entrepreneurs are to be supported as actively as in the last five years and we are hopeful that new funding will come on stream in the second half of 2015," added Regina Breheny.



The report finds that since the onset of the credit crunch in 2008, in excess of 1,000 Irish SMEs raised venture capital of €2.3bn.


Breheny commented; "These funds were raised almost exclusively by Irish venture capital fund managers who during this period supported the creation of up to 20,000 jobs; attracted over €900m of international capital into Ireland and geared up the State's investment through the Seed & Venture Capital Programme by almost seven times."



The Irish Venture Capital Association is the representative organisation for venture capital firms in Ireland. In the last ten years, Irish VCs have invested €1.2bn into Irish SMEs and have leveraged in an additional €1.2bn from international VCs through syndicated deals.







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