Irish start-ups and SMEs raised €401 million from investors in last year, up some 41 per cent on the previous year, according to an Irish Venture Capital Association VenturePulse survey.
The survey shows 2014 was the best year for Irish SMEs raising venture capital in the last decade, and up significantly from 2013, when €285 million was raised.
Among the SMEs which raised money last year were business software firm Intercom, which raised €17 million, and 3D-printing firm Mcor Technologies, which raised €8.75 million.
Software firm FieldAware raised €17.75 million, and and e-commerce platform Bitnet Technologies raised €10.5 million.
Telecoms software firm Brandtone closed a €14 million funding round, and software firm Information Mosaic raised €4.1 million.
Telecoms company Lime Microsystems received investment of €4.75 million.
Funding for expansion represented 83 per cent of the funds, according to the survey, while 13 per cent of the funds were raised by five Irish companies who went directly abroad, mainly to Silicon Valley.
“The growing ability of indigenous firms to raise investment in Silicon Valley is a tremendous validation of Irish technology, and reflects a growing confidence among Irish entrepreneurs,” Irish Venture Capital Association director general Regina Breheny said.
First-round seed funding recovered in the fourth quarter of 2014 to deliver annual growth of 31 per cent when compared with 2013.
However, Stephen Keogh, a corporate partner in William Fry, which acted as legal adviser in over 30 per cent of the funding rounds last year, emphasised that seed funds supported by the banking sector and Enterprise Ireland's Seed & Venture Capital Programme of 2006-2012 were close to being fully invested.
Mr Keogh said the importance of seed and early-stage funding could not be overestimated.
“We need to back promising early-stage start-ups in order to build a pipeline of successful Irish firms.
“While foreign direct investment makes a valuable contribution to the Irish economy it is increasingly mobile, and it is important that we do not become over dependent on it,” he said.
Since the onset of the financial crisis in 2008 more than 1,000 Irish SMEs have raised venture capital totalling €2.1 billion, according to the survey.
