Irish tech funding tops €1.4 billion in record year

Tech firms raised a record amount of venture capital in the first three months of the year, raising €380 million, up 52 percent from €249 million raised in the same period last year.

Funding total means tech companies have raised over $1.4B over the past 12 months.

However, the IVCA has warned of clouds on the venture finance horizon, with a “worrying decline” in deals below €10m and rising interest rates.

The biggest deals announced in the first quarter included fintech ‘unicorn’ company Wayflyer (€134m) and digital food ordering platform Flipdish (€94m). The Envirotech company Exergyn collected 32.7 million euros.

Overall, however, the number of venture deals fell by almost a third from 74 to 50 compared to the same period last year.

“All of the growth came from eight deals valued at over €10m each, including three over €30m,” said Nicola McClafferty, Chair of the Irish Venture Capital Association.

“While the momentum inherited from last year has continued for more established companies raising big rounds, some of that momentum appears to have stalled for earlier-stage companies.”

She said funding for seed companies, which are in the early stages and often rely on funding to get off the ground, has fallen to as low as 50 percent in some areas.

The numbers come at a difficult time for technology stocks internationally. Blue-chip companies like Apple, Google and Microsoft have seen stocks tumble on the prospect of rate hikes, which are expected to shift large chunks of funding away from high-growth tech funds and into more conservative investments like bonds.

“The global venture industry experienced a slowdown in the first quarter due to an uncertain global economic outlook and the war in Ukraine,” said Ms. McClafferty. “While challenging market conditions may continue, we also know that many great companies are formed and built during downturns, so we await the data for the coming quarters with interest.”

The value of deals between €5 million and €10 million fell 51 percent in the first quarter of the year, according to IVCA figures, compiled in collaboration with William Fry.

Financing transactions worth between €1 and €5 million also halved to €34.5 million, while transactions below €1 million fell by 31 percent to €8.9 million.

According to the IVCA, four fifths of the VC financing recorded in the first three months came from international sources.

“While this is to be welcomed and underscores the quality of Irish technology companies and their attractiveness to international investors, we have previously raised concerns about where any deficits might be filled as the global economy contracts,” said IVCA Director General Sarah-Jane Larkin.

Ms. Larkin added that seed funding fell nearly 40 percent to €22.3 million in the first quarter, compared to €36.5 million in the first quarter of 2021.