Friday, 5 February 2016

Venture Capital funding of Irish SMEs increases by 30% to €522m in 2015

Irish high tech SMEs raised €522m in 2015, an increase of 30% on last year, according to the Irish Venture Capital Association VenturePulse survey published today in association with William Fry.

The results show increased interest by overseas investors in the Irish tech sector which is a tribute to the calibre of its entrepreneurs and technology capabilities,” commented Brian Caulfield, chairman, IVCA (http://www.ivca.ie).

He said that the importance of strong global relationships is once again emphasised by continued support from international venture capital players.

“The Irish venture capital community continues to be the main source of funding for Irish innovative SMEs both through direct investment and as the local lead investor for international syndicate investors.”

International investors invested €241m (46% of total funds raised) in 2015 compared to €132m (33% of total funds raised) in 2014. This source of funds has grown from €45.5m (17% of total funds raised) in 2011 over the five year period.

Regina Breheny, director general, IVCA added that 18% of the funds were raised by eight Irish companies who went directly abroad, mainly to Silicon Valley, compared to 13% in 2014.

“This is a growing phenomenon and further validation of the calibre of the Irish technology sector.”
She added that the 30% increase in funding overall was significant in view of the fact that most Irish venture capital companies have been in the middle of fundraising programmes.

Growth/expansion funding was 92% of total funds raised.

Ms Breheny added that first round seed funding at 8% of funds raised should bottom out due to such funds currently being renewed by Enterprise Ireland’s Seed & Venture Capital Programme of 2013-2018.

Private investors, including Angels, provided the bulk of the seed funding in 2015.

Ms Breheny said that since the onset of the credit crunch in 2008, in excess of 1,200 Irish SMEs raised venture capital of €2.6bn. These funds were raised almost exclusively by Irish VC fund managers who during this period supported the creation of up to 20,000 jobs; attracted over €1.1 billion of capital into Ireland and geared up the State’s investment through the Seed & Venture Capital Programme by almost seven times.