Isolationist Trump emphasises need for indigenous funding for Irish companies
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International venture capital funding into Ireland has fallen by nearly €200m this year, and an isolationist-leaning Trump White House means Irish tech firms will have to rely on indigenous funding in the future rather than overseas investment.
New data from the Irish Venture Capital Association (IVCA) shows VC funding in Ireland for the nine months to the end of September fell by 18% to €945.3m from €1.1bn in 2023.
Globally VC funding fell by 3.7% over the same period. International VC funding into Ireland fell by almost €200m or 24% for the same period. International funding for the third quarter of €85m amounted to 44% of the total for the period.
Largest deals in the third quarter were medtech company, Neurent Medical (€18.2m); renewable energy firm, Circal (€15m); EV and solar installation provider, ePower (€15m); medical device company, Luminate (€13.9m); and medtech firm, Loci Orthopaedics (€13.8m).
IVCA chairman Gerry Maguire said a positive feature of the third quarter is that the number of deals rose by 55% to 59.
"While there were no rounds in the €30m plus range, this was compensated for by an increase in deals under €10m, including seed funding.
He also issued a warning to Irish companies on future funding in light of Donald Trump's election victory.
"The potential for an isolationist-leaning incoming administration in the White House to implement policies that could be negative for Ireland emphasises the need for us to take these indigenous companies to the next level and grow our own tech champions rather than rely on less committed overseas investment," he said.
According to their report, life sciences was the leading sector in the nine-month period raising 42% of the total (€392.8m), followed by envirotech (13%); regtech (10%); fintech and software (both 9%). in the third quarter, AI was the third highest sector raising 11%.
IVCA director general Sarah-Jane Larkin said that while there were no deals over €30m in this quarter, there was an encouraging bounce in smaller rounds. "Deals in the €3-€5m range rose by 52% to €29m. €1m-€3m rounds grew by 16% to €26m, and deals under €1m rose by nearly a third to €9m. Seed funding, or first rounds raised by SMEs, more than doubled to €33.5m."
“Access to public capital for VCs through the likes of EI (Enterprise Ireland) and ISIF (Ireland Strategic Investment Fund) in Ireland and EIF (European Investment Fund in Europe, has never been better.
"However, there is now a severe shortage of matching private capital in Ireland from investors such as pension funds, family offices and corporates. Government policy can have a significant impact in fixing this, as is happening in the UK, and in several EU countries such as Denmark and France.”