Tuesday 20 August 2019

Tech firms on track to raise more than €1bn in record venture capital haul

IVCA chairman Peter Sandys. Photo: Fennell Photograph
IVCA chairman Peter Sandys. Photo: Fennell Photograph
Adrian Weckler

Adrian Weckler

Irish-based tech firms look set to raise more than €1bn in venture cash this year, according to new industry figures from the Irish Venture Capital Association (IVCA).

The first nine months of the year saw Irish tech firms and startups attract €817m in venture capital, the highest amount ever recorded.

The record haul, 11pc higher than the same period last year, indicates that venture cash is now a mainstream source of funding for hundreds of Irish businesses.

The majority of the money (88pc) raised went to companies seeking expansion capital, according to the IVCA.

"The third quarter was boosted by activity in Northern Ireland," said Peter Sandys, chairman of the IVCA. "Belfast fintech company Options accounted for 30pc of total funds raised in this quarter. This is the largest fundraising deal in Northern Ireland in over 10 years.

"Seed and early stage support is growing significantly again with €59m raised in the third quarter, reaching a high of €115.2m for the nine months to the end of September."

The IVCA figures indicate that International syndicates invested €220m, accounting for 58pc of total funds raised.

"The Irish venture capital community continues to be the main source of funding for Irish innovative SMEs both through direct investment and as the local lead investor for international syndicates," said Regina Breheny, director general of the IVCA.

The majority of funding rounds in Ireland are under €3m, while European venture capital funds have performed above average compared to other investment sources over the last 10 years.

Despite the bull run in the tech industry, Mr Sandys recently said that he doesn't believe there is a bubble threatening the system. "We see no evidence of one whatsoever. So there's definitely no bubble effect that we can see."

Cloud firm Options had the largest single fundraising event of the year with a €100m round earlier this year.

Dublin-based IT service company Version 1 was next, raising €90m from UK equity firm Volpi Capital, ahead of expected expansion across Europe.

Barry Napier's Cubic Telecom raised €40m in August, bringing the company's total funding close to €80m.

The company, which employs 160 people in Sandyford, has deals in place with approximately 80 mobile operators around the world.

It recently began trials with China Mobile, the world's biggest operator.

Smaller rounds included €25m for the Dublin-based money-messaging startup Plynk and €10m each for telecoms firm Blueface and biotech company Atlantic Therapeutics.

"Since the onset of the credit crunch in 2008, more than 1,450 Irish SMEs raised venture capital of €3.6bn," said Ms Breheny.

"These funds were raised almost exclusively by Irish VC fund managers who, during this period, supported the creation of up to 20,000 jobs, attracted over €1.6bn of capital into Ireland and geared up the State's investment through the Seed And Venture Capital Programme by almost 16 times."

A small number of companies included in the IVCA list are Dublin-based but maintain bigger operations outside Ireland. Iterum Therapeutics raised €57m despite predominantly US operations.

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