Information technology companies in the Republic received more venture capital (VC) investment per capita in 2001 than those in any other European state except Sweden, according to a new study.
However, overall VC funding fell precipitously in 2001 and the first six months of this year, compared to 2000. The figures come from deal analysis in the Deals in Europe 2002 mid-year report, published by European technology investment magazine Tornado Insider.
European VC investment fell 24 per cent, from €15.3 billion in 2000 to €11.5 billion in 2001, and looks set to slip again this year. From January to June of 2002, VC investment was only €3.6 billion.
The Republic saw a similar percentage decline. From €480 million in VC funding in 2000, investment tumbled to €330.1 million in 2001, and the figure for the first six months of this year comes to just €104 million.
Britain, at the top of the table, saw €5.3 billion in deals in 2000. By 2001, this had dropped to €2.75 billion, and first-half 2002 totalled €706.6 million.
While the Republic held its fifth place position in Europe in terms of total amount invested in 2000 and 2001, Denmark, Switzerland and Belgium - all countries that trailed the State in the past - have overtaken the Republic in the first half of this year.
Nevertheless, according to the report, those 30 months still represent the most active period of VC investment in Europe ever, as Europe slowly followed the lead of the United States.
Britain retained its top spot over other European states for the sheer number of investment deals, with about 2,750 in 2001. Trailing some distance behind are Germany, with about 1,200 deals, then France with about 1,000 deals and Sweden with under 900. But the Republic and Sweden held the lead for the amount per capita invested in 2001, indicating a much-improved venture funding environment in the Republic since the 1990s.
Sweden leads the tables, with about €95 invested per capita, while the Republic saw around €90 per capita. The next three states are Britain, Finland and Denmark, each with under €50 per capita. Germany trailed in ninth place with under €20 investment per capita. In contrast, the US invested about €400 per capita, the highest level of venture funding in the world.
In terms of technology sectors, while internet companies received the most money in 2000 - €3.25 billion - followed closely by software, with €3.16 billion, internet investment had fallen by two-thirds in 2001, giving software the largest total at €2.65 billion. E-commerce investments also fell steeply, from €2.45 billion in 2000 to just €777 million in 2001.
Biotech investment has made a strong showing, doubling its 2000 funding level to 15.8 per cent of investments in 2001 and 22 per cent of investments in the first half of this year. Telecommunications saw 50 per cent growth between 2000 and 2001, while wireless investments fell from 18 per cent of investments last year to 7 per cent in the first half of this year.
