Business Technology

Sunday 23 October 2016

Seed-sewing segments are still the biggest sector for funding

Published 02/04/2015 | 02:30

Ben Harris, CEO and Co Founder of Drop with his iPad weighing scales .
Ben Harris, CEO and Co Founder of Drop with his iPad weighing scales .

Three-quarters of Irish tech firms that attract venture capital funding close rounds of under €3m, according to figures from the Irish Venture Capital Association.

  • Go To

Companies such as the Dublin-based smart kitchen scales startup, Drop, which landed €1.5m in seed funding last October, outnumber larger firms by three to one when it comes to raising venture finance.

This reflects on both the companies seeking funding and the investment community here, according to market players.

"We had a big lift in the seed round numbers last year," said John Flynn, managing director of ACT Venture Capital.

"But where you get a big bounce in the overall figures is when you get companies that can raise €5m or €10m. But skillsets are more challenging to find for those bigger rounds."

Infrastructural factors, such as the country's tax climate, are also an issue when it comes to venture funding in Ireland.

"We don't have a competitive tax regime compared to the UK in some key respects," said Flynn. "That will continue to have an effect unless something happens around that."

Around three-quarters of venture funding rounds here involve a combination of local companies and international firms or 'angel' investors.

However, some startups don't need Irish venture firms to raise venture money.

Last month, online learning startup Fishtree, which is a spinoff of the former billion-dollar Irish e-learning firm Riverdeep, announced a $3m (€2.7m) funding round from a variety of US venture capitalists. The Dublin-based company, which had previously raised €1.5m in seed funding, is chasing a global €2.5bn online learning market that is concentrated in the US and Asia.

"All of our research and development is going to be done out of Dublin while our new US office will focus on business development, particularly in the US market," said Fishtree's co-founder, Terry Nealon.

This is a growing trend among young Irish tech firms, with others such as Boxever (€4.3m round last year) and Viddyad (€700,000) following a similar path.

Indo Business

Read More

Promoted articles

Editors Choice

Also in Business