Venture capital funding to Irish technology firms increased by 8.9% to €249.4m in the first quarter of 2021, up from €228.9m in the same period last year, according to the Irish Venture Capital Association VenturePulse survey published today in association with William Fry.
“Funding appears to have shaken off any restrictions caused by Covid-19,” commented Gillian Buckley, chairperson, Irish Venture Capital Association. “This is reflected in the fact that the number of deals increased by 65% to 74, compared to 48 in the same quarter last year, largely driven by a welcome recovery in early stage funding.”
She pointed out that funding to start-ups and early stage indigenous companies for the 12 months last year fell by almost a third. “We hope the more positive outcome in the first quarter is a harbinger of recovery for early stage funding in 2021.”
The first quarter 2021 bounce back in start-up and early stage funding is reflected in the fact that deals in the €1-5m category jumped by 84% to €70.3m from €38m, while the number of transactions nearly doubled from 18 to 33.
Deals of less than €1m grew by 53% to €12.9m compared to €8.4m in the same period last year. The number of deals in this category rose by 55% to 34 from 22.
“Government support for start-ups and early stage companies through EI (Enterprise Ireland) and ISIF (Ireland Strategic Investment Fund) is beginning to show a real impact,” commented Sarah-Jane Larkin, director general, IVCA. “Without this it is unlikely we be seeing the growing importance of sectors such as life sciences to the Irish economy.”
Life sciences accounted for €130m or over half (52%) of funding in this quarter driven by an €89m round for Mainstay Medical. Next highest category was software at €46.7m (19%) followed by cybersecurity €21.9m (9%).
Mark Quealy, a partner in William Fry’s Corporate department commented that “The recent figures show a strong resurgence in venture investment activity across all sectors and all types of deal size. The sharply increased volume of €1m – €5m funding rounds – which would typically correspond to quite early-stage companies raising equity finance – is particularly welcome, given the funding and cashflow-related challenges that such companies have faced in the past year.”