Sunday 23 July 2017

Venture capital boom in Ireland as €888m funding recorded

Private finance companies pumped 70pc more cash into tech firms in 2016 than in 2015

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Adrian Weckler

Adrian Weckler

Ireland is undergoing a venture capital boom with €888m in funding recorded here last year.

New figures from the Irish Venture Capital Association (IVCA) claim that private finance companies pumped 70pc more cash into tech firms in 2016 than in 2015.

The statistics also claim that ‘seed’ funding for early-stage startups has reached its highest level here, exceeding €70m.

However, the figures may be interpreted as lopsided, with 11 companies taking 38pc of the year’s VC haul.

Of these, several are managed outside Ireland with small headquarters based here for regulatory or tax reasons.

Innocoll, which is based in Athlone for tax purposes but is managed from the US and has a manufacturing facility in Germany, raised €37m in funding last year.

Similarly, Circle Financial, a blockchain payments company largely run from Boston, raised €53m in funding last year.

However, some of the biggest funding rounds were for indigenous Irish companies. Dublin-based oncology firm Carrick Therapeutics raised €84m while another Dublin-based life sciences firm, Genomics Medicine, raised €36m.

Companies that straddle Ireland and the US also did well. Intercom, which operates its design in Dublin but its sales headquarters in San Francisco, raised €44.2m.

The figures show that there has been a surge of international interest in the Irish venture funding scene with €548m of the €888m invested by international syndicate investors working with local Irish venture partners.

“This performance is particularly significant as venture capital activity in the US declined by 13pc in 2016 and by 4pc in the UK,” said Michael Murphy, chairman of Irish Venture Capital Association (IVCA).

“The figures demonstrate the continuing attraction of Irish tech firms by international investors.”

Life sciences companies continue to attract the biggest individual funding rounds.

“The life sciences sector was the star performer in 2016 with 52pc of funds raised,” said Regina Breheny, director general of the IVCA. “The life sciences sector in Ireland is showing signs of maturity and is benefiting from the State’s investment in research and development through Science Foundation Ireland.”

The IVCA figures claim that growth and expansion funding made up 92pc of total funds raised in Ireland last year.

Mr Murphy said that since the onset of the credit crunch in 2008, in excess of 1,400 Irish small to medium-sized firms have raised venture capital of €3.5bn. He said that these funds attracted over €1.7bn of capital into Ireland and “geared up” the State’s investment through the seed and venture capital programmes by almost 16 times.

The IVCA Venture Pulse survey, published in association with William Fry, is compiled using data from equity funds raised by Irish companies and other companies headquartered in Ireland from a variety of investors.

This research is the result of information supplied internally by members of the Irish Venture Capital Association and from published information where IVCA members were not involved.

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