Venture capital firms will invest about €225 million in Irish technology firms in 2004, representing a 40 per cent increase on investment levels during 2003.

There will also be at least four public flotations of Irish firms in 2004, reflecting improved sentiment among investors, according to new forecasts published today by Goodbody Stockbrokers.

Goodbody's forecasts, which have been prepared for the start of its SummIT2004 funding conference, also predict a rise in merger and acquisition activity involving Irish technology firms.

"There was a blockage in the system over the past two years, with venture capitalists finding that money was not coming out of their investments, but there is more liquidity in the market now, says Mr Mark Donovan, director of Goodbody Corporate Finance.

"Firms are now being rewarded for their acquisitions and we are talking to at least three Irish firms about potential flotations on the alternative investment market."

There were 17 initial public offerings in the last quarter of 2003 in the US and Europe, and there are important technology offerings due in the next few months, including Google and Salesforce, he says.

Increased activity on public markets is helping to build more confidence in the private investment market, which saw investment fall to €165 million in 2003, down from €470 million in 2000.