Irish Venture Capital Investment Plummets In Third Quarter After Record First Half
Venture capital funding for startups and small and midsized enterprises plunged by nearly 40% in the third quarter, according to the latest figures from the Irish Venture Capital Association VenturePulse survey.
Life sciences and clean technology were the only bright spots in findings that the IVCA warned should “raise alarm bells,” as it said that funding across most sectors and investment sizes “fell significantly.”
Published with law firm William Fry, the report found that €190M was raised in the third quarter compared with €309M for the same period last year.
This sits in stark contrast to the previous IVCA report covering the first half of this year, which saw a record €963M in VC investment, up 24% over the same period in 2022 and significantly outperforming global funding trends.
“Following a strong first half, overall funding for the nine months to end September 2023 just about held up, with an increase of 6% to just over €1B, compared to the same period last year,” IVCA Chair Denise Sidhu said. “However, the Irish third quarter data raises alarm bells, as the value of deals across all sizes fell significantly with the exception of those under €1M.”
The number of transactions was down by 26% compared with the corresponding period last year, with the third quarter’s largest deals recorded for software firm Ocuco (€60M), the life sciences firm Shorla Oncology (€32M) and ProVerum (€15M), plus the infrastructure tech company UrbanVolt (€26M).
The most successful sector in terms of raising investment so far this year has proven to be envirotech at €580M, representing around 50% of total VC investment, followed by life sciences at €157M (14%), software at €92M, AI at €88M and fintech at €82M.
IVCA Director General Sarah-Jane Larkin cautioned that another concerning indicator was that the value of international VC investment in the third quarter plummeted by €120M, down 69% on the previous year.
“The reliance on international VC investors at a time when U.S. venture capital and private equity investment has slowed significantly, emphasises the need for Ireland Inc to build local private funding sources in order to combat global dependence and headwinds,” she said.