Irish tech and biotech companies received €249.4m in first quarter as funding for early-stage firms sees significant growth

Gillian Buckley, chairperson of the Irish Venture Capital Association. Photo: Brad Anderson

Adrian Weckler

A jump in funding to early-stage companies helped grow the overall amount of venture capital by 9pc in the first three months of the year.

The figures, compiled by the Irish Venture Capital Association in association with William Fry, show that tech and biotech funding here rose to €249.4m in the first quarter, up from €228.9m during the same period last year.

“Funding appears to have shaken off any restrictions caused by Covid-19,” said Gillian Buckley, chairperson of Irish Venture Capital Association. “This is reflected in the fact that the number of deals increased by 65pc to 74, compared to 48 in the same quarter last year, largely driven by a welcome recovery in early-stage funding.”

Deals valued at between €1m and €5m jumped by 84pc to €70.3m, while the number of transactions in this funding tier almost doubled from 18 to 33. Deals of less than €1m grew by 53pc to €12.9m, compared to €8.4m in the same period last year.

The surge in financing to startups and small-tech firms will come as a relief to policy makers who had seen a consistent move away from early-stage funding in favour of established tech companies.

Life sciences accounted for over half (€130m) of funding in this quarter, largely due to an €89m round for Dublin-based medical devices firm Mainstay Medical. The next highest category was software at €46.7m, representing 19pc of the funding total. Cybersecurity (€21.9m) was third.

Meanwhile, Irish organisations are to join in a European plan that aims to create 500 new tech ‘unicorns’ in the coming years.

There are currently 51 European private tech companies with valuations of over €1bn, of which two – Intercom and Workday – are Irish.

The initiative, called ‘Action Plan to Make Europe the new Global Powerhouse for Start-ups’, will focus on changing or introducing laws on tax incentives, employee stock options, a new ‘Start-up Green Card’, insolvency reform and public procurement.

The European Commission estimates there are around 80,000 startups in the EU, of which 51 are ‘unicorns’. The investments raised by European start-ups totalled $41bn (€33.7bn) in 2020, up from $36.6bn (€30.1bn) in 2019.

The Commission estimates that of 27 recently formed European ‘unicorns’, seven are “committed” to remaining within the EU after their funding rounds. This, the Commission says, “paints a much bleaker picture” of EU startups in comparison to the US, where 67 new unicorns were created in the same period.

Scale Ireland, which represents Irish startups and ‘scale-ups’, will join leaders from 26 other EU start-up organisations to present an ‘action plan’ to EU Commissioner Mariya Gabriel, who has responsibility for innovation, research, culture, education and youth in the EU.

“This is an important initiative as it has been drawn up by national start-up organisations across the EU, and it provides the European Commission with a very clear and comprehensive list of measures to help Europe become a global leader for start- ups,” said ­Martina Fitzgerald, CEO of Scale Ireland.

“If most of these recommendations were enacted, it would be a game changer for the ­sector in Europe.”