Irish venture capital investment slumped in the second quarter as the tightening interest rate environment and economic uncertainty led to a slowdown in transactions.
That comes from KPMG’s latest Venture Pulse report, which tracks global venture capital activity.
After two years of strong venture capital investment, fueled by economic growth in Ireland, this type of investment declined in the second quarter of the year. Irish companies raised US$207 million (€203 million) in venture capital in June.
This was a notable drop from the same quarter in 2021, in which Irish companies received $641.5 million in such investments.
It was also down from the first quarter of the year when VC investments in Ireland were $401 million.
VC investment in Ireland in Q2 was spread across 44 deals, the largest of which involved Cork automation software developer Keevlar, which received $24 million.
Galway-based medtech Vivasure Medical was close behind, receiving $23 million in investments, while Workvivo, a Cork-based employee engagement software company, received a $22 million VC investment in the second quarter.
KPMG reported that 10 of those deals were in the $10 million to $25 million range, with none surpassing the $100 million mark.
This downward trend was also reflected globally as global activity levels declined. VC investments declined to $120 billion in the second quarter of 2022, compared to $165.3 billion in the first quarter.
The number of deals also fell sharply from 11,468 in Q1 to 8,420 in Q2.
KPMG pointed to rising geopolitical tensions and economic uncertainty as key factors behind the slowdown.
Changes in monetary policy also played a role
the decrease in the number of deals.
“As the global economy has become increasingly uncertain, we are now seeing a higher level of caution in the venture capital space, particularly for larger deals, not just in Ireland but globally,” said KPMG fintech head Anna Scally.
“In addition, the European Central Bank also announced in Q2 22 that it would raise interest rates for the first time in 11 years.”
Ms Scally added that investment is likely to remain “subdued” for the rest of the year.
https://www.independent.ie/business/irish/irish-venture-capital-investments-plunge-amid-economic-uncertainty-41864147.html Irish venture capital investments plummet amid economic uncertainty