Irish technology firms raise €52m in funding in early 2013
IRISH technology companies raised €52m in funding in the first months of 2013, exceeding international standards, but experts warn that a shortage of finance for start-ups could emerge later this year.
“This is similar to last year and a highly satisfactory performance especially as activity in international markets is experiencing significant volatility” says Dr Manus Rogan, chairman of the The Irish Venture Capital Association. “For example US quarter numbers are down 6pc as the global credit crunch continues to bite.”
However the amount of funding raised by start-ups was down. In the first three months of 2013, early-stage companies raised €7.3m worth of seed capital compared to €13.3m over the same period in 2012.
One of the country’s biggest law firms has warned that this indicate that a shortage of start-up funding could emerge this year. “Seed funds supported by the banking sector and Enterprise Ireland’s seed and venture capital programme of 2006-2012 will be fully invested in the near term” says Stephen Keogh, a partner with corporate solicitors William Fry. “These funds will need to be renewed if entrepreneurs are to be supported as actively as in the last five years.”
The IVCA says the venture capital funds rather than banks or other types of investors are the main source of funding for Irish small and medium enterprises (SMEs). It says that since 2008, 764 Irish SMEs raised venture capital of €1.5bn, supporting the creation of as many as 20,000 jobs.