Venture capital funding hits €309m in third quarter

Irish firms saw venture capital funding hit €309 million in the third quarter of the year, an annual rise of 34 per cent, new data from the Irish Venture Capital Association showed.

Growth in the three-month period was boosted by two deals in the €30 million plus-category, with fintech Fonoa raising €62 million and Irish cybersecurity automation start-up Tines extending its Series B round with a €55 million raise, and five deals in the €10 million to €30 million range. Those deals included raises by Protex AI, LetsGetChecked and Equine MediRecord.

The IVCA VenturePulse survey showed that although deals under €10 million fell, seed funding was up 45 per cent year on year.

In total, funding into Irish SMEs for the nine months to the end of September was more than €1 billion, up 25 per cent from the €871.8 million recorded in the third quarter of 2021.

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The sectors leading the way in terms of funding were cybersecurity and fintech, accounting for 28 per cent of total funding respectively. Software accounted for 13 per cent, while life sciences saw 10 per cent of funding.

IVCA chairperson Leo Hamill said it was an “encouraging outcome” for the indigenous technology sector. Irish funding compared favourably to Europe, where funding in the third quarter fell by 35 per cent year on year and by 44 per cent for the nine months of the year.

Deals between €5 million and €10 million fell 54 per cent to €33.5 million. Deals under €1 million, meanwhile, fell by 41 per cent from €11.4 million to €6.7 million.

“More tellingly perhaps, the number of deals in the latter category dropped sharply to six from 22 in the same quarter last year,” said Sarah-Jane Larkin, director general of the Irish Venture Capital Association. “The softness in these two categories probably reflects uncertainty over the global economic outlook combined with the impact of the Russian war against Ukraine.”

Despite this, Ms Larkin said the outlook remained encouraging for Irish based start-ups and companies looking to raise first round funding. While seed funding rose to €44.8 million in the third quarter and up 13 per cent to €92 million in the first nine months for Irish start-ups, seed funding in Europe fell 29 per cent for the quarter and 20 per cent in the year to date.

Ms Larkin noted the number of Irish funds currently investing at seed stage in the Irish market, including ACT, Delta, Elkstone, Furthr and Lightstone Ventures, which will be further supported by the Government’s €90 million Irish innovation seed fund.