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Investment in tech surges as Irish firms raise €1.2bn

Big deals on the rise but female founders and start-ups get less

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Brian Caulfield, a venture partner in Draper Esprit, expressed concern about stagnant early-stage funding results. Photo: Mark Condren

Brian Caulfield, a venture partner in Draper Esprit, expressed concern about stagnant early-stage funding results. Photo: Mark Condren

Funding: Peter Foley’s firm Let’sGetChecked raised $71m

Funding: Peter Foley’s firm Let’sGetChecked raised $71m

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Brian Caulfield, a venture partner in Draper Esprit, expressed concern about stagnant early-stage funding results. Photo: Mark Condren

Irish tech funding reached a record €1.2bn in 2020, as the pandemic turned investors’ attention toward software, health and financial technology.

The figures, compiled by TechIreland, also show that there were more companies raising significant financing rounds than previous years, at 264.

According to TechIreland’s collated figures, the HealthTech sector got the lion’s share of cash raised last year at a total of €411m.

That included firms with Covid-related solutions, such as Peter Foley’s Let'sGetChecked which raised €60m to produce home collection PCR kits – 64 of the companies backed last year by venture capital were in the health sector.

Funding rounds of over €30m were twice as common last year as before, with 10 firms signing deals worth at least that number.

The number of companies raising between €5m and €30m also ballooned, as a combination of low interest rates and a scarcity of alternative investment options sucked cash into Ireland’s tech ecosystem.

Most individual firms that raised money were in the wider business tech sector, although the ticket size tended to be much smaller with 86 companies raising €219m.

Forty-eight companies with female founders or co-founders in Ireland raised a record €105m, even though the average amount raised by a female-founded firm remains less than half of a male-founded company, at €2.1m.

However, TechIreland says there is a downward trend in funding for very early-stage companies.

“There are some worrying signs of a narrowing pipeline for seed funding,” said John O’Dea, TechIreland’s chief executive. “The investment going into early-stage rounds of €1m to €3m dropped for the fourth consecutive year.”

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Brian Caulfield, a venture partner in Draper Esprit, also expressed concern about stagnant early-stage funding results.

“The amount of money raised by these [early stage] companies continued the pattern of decline that has been evident since 2017, falling from €169m in 2019 to €151m,” he said. “So, a worrying trend continues.”

FinTech was also strongly represented with 30 companies raising a total of €186m, while 10 CleanTech companies raised €173m between them.

While some of the largest deals recorded – such as health tech firm ALX Oncology’s €98m – were associated with companies whose main operations are outside the State, the number of homegrown companies attracting large investor attention has mushroomed.

The solar technology firm Amarenco, which has a Cork office, raised €165m.

But Dublin-based firms continue to dominate the lion’s share of venture cash raised in Ireland, sucking up over 60pc of the €1.2bn funding last year.

By contrast, Northern Ireland saw just €26m of venture cash, split between 29 companies, while the West recorded €58m in deals, allocated among 27 different companies.

“Irish start-up funding, while challenging, remains robust,” said Niall McEvoy, Enterprise Ireland’s high potential start-up boss. “We have more than 10 active institutional investors alongside Enterprise Ireland, a strong angel network in HBAN and European Angel Fund, good family office activity and now crowd-funding as a real option.”


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