Irish SMEs are raising 25 per cent more capital than last year, bucking European trend

Irish firms have raised over €1bn in venture capital so far this year, up 25 per cent from 2021 and bucking European trends.

Corporate financing for small and medium-sized enterprises (SMEs) reached almost €1.1 billion in the first nine months, compared to €871.8 million in the same period of the previous year.

Funding increased 34 percent year-on-year to €309 million in the third quarter, according to the Irish Venture Capital Association (IVCA) VenturePulse survey in partnership with William Fry.

Most of the capital raised went to companies in the technology sector.

“In the context of ongoing global uncertainty, this is an encouraging result for the domestic technology sector and compares favorably to Europe, where funding fell 35 percent year-on-year in the third quarter – and 44 percent for the nine-month period,” said IVCA Chairman Leo Hamill .

Growth in the third quarter was fueled by very large deals, including two capital increases of nearly €60 million each by tax automation platform Fonoa and cybersecurity start-up Tines.

Seed funding – which is for early-stage first-round investments and tends to be smaller – was also buoyant, up 45% to €44.8 million in the third quarter and up 13% year-to-date.

There are a number of Irish funds currently investing at the seed stage including ACT, Delta, Elkstone, Furthr and Lightstone Ventures, while earlier this year the Government tripled its Innovation Seed Fund to €90m.

Aside from seed funding, however, smaller deals have stumbled this year.

Deals of 5 to 10 million euros fell in the three months to September by 54 percent to 33.5 million euros.

Transactions under €1m fell 41 percent from €11.4m to €6.7m, with just six transactions being completed compared to 22 last year.

“The softness in these two categories likely reflects uncertainty about the global economic outlook coupled with the impact of Russia’s war against Ukraine,” said Sarah-Jane Larkin, IVCA Director General.

Cybersecurity and fintech companies executed transactions in the third quarter and raised 28 percent of the total funding, with software companies (13 percent), life sciences (10 percent) and other companies (17 percent) making up the rest. Irish SMEs are raising 25 per cent more capital than last year, bucking European trend

Fry Electronics Team

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