October 13, 2011
Indigenous technology firms raised €161.9 million from investors in the first half of 2011, an increase of 58 per cent on the same six-month period a year earlier, according to the Irish Venture Capital Association (IVCA).
However, the association warned that local venture capital companies may start to run out of funds from next year which would have a serious impact on the future expansion of the country’s tech sector.
It estimates there could be a shortfall of €1.5 billion from 2012 over the next five years to fund expansion phases.
Overall, 86 firms raised funds during the first six months of the year, compared to 82 in the same period last year and to 66 in 2009. Amounts raised ranged from €100,000 to €20 million.
“The figures reflect a welcome increase in funds raised despite the global credit crisis,” said association chairman Maurice Roche.
The association’s VenturePulse survey shows first round funding remained steady at 19 per cent of all funds raised.
“Ireland remains a great location for early stage companies with good ideas and management to raise money. The crisis will come in funding vital future expansion rounds,” said Mr Roche.
Follow-on funding represented 81 per cent of funds raised in the first half of 2011. These funds were provided in the main by venture capital firms of which 53 per cent were Irish and 47 per cent provided by international venture capitalists through syndicated deals.
During the first half of 2011, 40 companies in the business service sector raised a total of €56.8 million, equivalent to 35 per cent of all funds raised.
Eight companies operating in the environment technology sector raised €41 million, while 13 firms in the drug delivery and medical device industries raised €25.5 million.
In the communications and telecoms sectors, 10 firms raised €25.3 million in funding, while six companies in the pharma/biotechnology industry raised €5.9 million.
The VenturePulse survey measures funding raised from domestic and international venture capital funds, AIB and Bank of Ireland seed capital funds, Enterprise Ireland and private investors.