Irish tech defies downturn with record funding of €778 million in H1 2022

Technology financing from venture capital rose to a record €778 million in the first half of 2022, despite slumps in public tech stocks and valuations of private tech companies.

That’s a 21 percent increase from the amount raised at the same time last year, which was a record at the time.

According to the Irish Venture Capital Association (IVCA), which compiled the figures in conjunction with William Fry, the overall growth was due to a huge increase in transactions of between €10m and €30m (up 36 per cent to €371m).

However, the number of financing rounds worth less than EUR 10 million fell sharply.

Transactions under €1 million fell 19 percent (to €21.1 million), while transactions in the €1-5 million range fell 9 percent (to €83.6 million). Financing rounds worth 5 to 10 million euros fell by 43 percent.

Seed funding, which represents investments in the early stages of the first round, fell 7 percent to €47.1 million.

And there was a 50 percent drop in funding from foreign investors, which fell to 152 million euros from 303 million euros in the second quarter.

“It has been an overall strong first half for Irish technology companies raising funds, particularly considering the geopolitical and economic headwinds and the decline in listed technology stocks over the period,” said Leo Hamill, Chairman of the Irish Venture Capital Association. “It remains to be seen whether the significant slowdown in growth in the second quarter to below 2 percent heralds a more difficult second half of the year.”

“This over-reliance on foreign investment threatens Ireland’s ability to continue to develop world-class domestic technology companies. The tide of available global capital is beginning to ebb, underscoring the importance of our pre-budget proposal, which recommends measures to strengthen domestic sources of funding.”

Sarah-Jane Larkin, chief executive of the Irish Venture Capital Association, said there was a rebound in the second quarter, although she warned it was starting from a low base. Second-quarter seed funding rose 77 percent to €24.8 million from €14 million, she said.

“We are optimistic that this upswing in key seed funding will continue as the government’s €90m fund for Irish start-ups becomes operational in the second half,” she said.

“Based on transaction size, it’s quite difficult to analyze what’s going on in the market until we see the results for the next two quarters. Overall, if the bigger deals don’t materialize in the second half, we could see a downturn. But while big deals are important, being able to raise funding is important for early-stage companies and those looking to raise less than €5 million.”

Fintech was responsible for the largest share of financing transactions with 220.3 million euros or 29 percent of the total. This was followed by software with €187 million (24 units) and life sciences (€134.6 million or 17 units). Irish tech defies downturn with record funding of €778 million in H1 2022

Fry Electronics Team

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