Irish Tech Start-ups Struggle to Raise Funding as Big Deals Dominate Investment Landscape, Ireland

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Irish tech start-ups are facing challenges when it comes to raising funding, despite the overall investment landscape reaching new records. According to a survey conducted by the Irish Venture Capital Association, Irish tech companies managed to raise a staggering €963 million in funding from venture capital firms in the first half of this year. However, the figures were heavily influenced by a small number of big deals, leaving smaller firms struggling to secure amounts below €1 million.

While the overall funding figures experienced a 24% increase compared to the previous year, it is important to note that the numbers were somewhat skewed by these larger investment deals. Denise Sidhu, the Chairperson of the Irish Venture Capital Association, stated that if deals over €30 million were excluded, investment in the second quarter dropped by 52% compared to the previous year and by 16% for the first half of this year.

Despite the challenges faced by smaller start-ups, the survey highlights the impressive performance of Irish tech companies, outperforming global trends. The first half of this year saw a decline of over 50% in venture capital investment worldwide. Comparatively, Irish tech companies managed to raise more than €1 billion in 2021, reaching this milestone for the first time.

Some notable investment deals included almost €60 million secured by electric vehicle charging company Weev in the second quarter, as well as €65 million raised by artificial intelligence and machine learning company Everseen. Additionally, Jolt Energy was able to raise an impressive €150 million in the second quarter.

However, for start-ups seeking smaller amounts of funding, the situation is more challenging. The survey revealed that the value of deals under €1 million decreased by almost a third to €14.6 million, with a 33% decrease in the second quarter to €8 million. The number of deals also declined, with only 27 deals falling under the €1 million mark in the first six months of this year, marking a 55% decline compared to the previous year.

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Despite these struggles, there were still positive indicators. Seed funding experienced a significant increase of over 80% to €44.9 million in the second quarter. The survey also highlighted the growing importance of artificial intelligence in the tech industry, with AI companies raising 9% of the total funding or €83 million in the first half of this year.

However, the survey also emphasized the high reliance on overseas investment, underscoring the need for local funding sources. The value of international investment rose from 58% of the total last year to over 80% in 2023. The Irish Venture Capital Association called on the government to change tax credit legislation to make it easier to invest in Irish start-ups. Additionally, they suggested investing some of the proposed sovereign wealth fund into domestic technology companies.

In conclusion, while Irish tech companies are experiencing success in terms of overall investment, the funding landscape remains challenging for smaller start-ups. The industry’s reliance on overseas investment also highlights the need for local funding sources. By addressing these areas, it is hoped that Irish tech start-ups will have improved access to funding opportunities, allowing them to thrive and contribute to the country’s growing tech sector.

Frequently Asked Questions (FAQs) Related to the Above News

How much funding did Irish tech companies raise in the first half of this year?

Irish tech companies raised a staggering €963 million in funding from venture capital firms in the first half of this year.

Were the funding figures heavily influenced by a few large deals?

Yes, the funding figures were heavily influenced by a small number of big deals, leaving smaller firms struggling to secure amounts below €1 million.

Did the overall funding figures increase compared to the previous year?

Yes, the overall funding figures experienced a 24% increase compared to the previous year.

How did excluding deals over €30 million affect the investment numbers?

Excluding deals over €30 million, investment in the second quarter dropped by 52% compared to the previous year and by 16% for the first half of this year.

How did Irish tech companies perform compared to global trends?

Irish tech companies outperformed global trends, raising more than €1 billion in 2021, reaching this milestone for the first time.

Can you name some notable investment deals in the Irish tech industry?

Some notable investment deals include almost €60 million secured by Weev, an electric vehicle charging company, €65 million raised by Everseen, an artificial intelligence and machine learning company, and €150 million raised by Jolt Energy.

Was it more challenging for smaller start-ups to secure funding?

Yes, the survey revealed that smaller start-ups faced challenges in securing funding, with the value of deals under €1 million decreasing, and a decrease in the number of deals falling under the €1 million mark.

Did seed funding experience an increase?

Yes, seed funding experienced a significant increase of over 80% to €44.9 million in the second quarter.

How much funding did AI companies raise in the first half of this year?

AI companies raised 9% of the total funding or €83 million in the first half of this year, highlighting the growing importance of AI in the tech industry.

What was the reliance on overseas investment in the Irish tech industry?

The reliance on overseas investment increased, with international investment accounting for over 80% of the total in 2023, compared to 58% in the previous year.

What measures were suggested to improve funding for Irish start-ups?

The Irish Venture Capital Association called on the government to change tax credit legislation to make it easier to invest in Irish start-ups and suggested investing some of the proposed sovereign wealth fund into domestic technology companies.

What are the challenges and opportunities for Irish tech start-ups in terms of funding?

The funding landscape remains challenging for smaller start-ups, but with the right support and increased access to funding opportunities, Irish tech start-ups can thrive and contribute to the country's growing tech sector.

Please note that the FAQs provided on this page are based on the news article published. While we strive to provide accurate and up-to-date information, it is always recommended to consult relevant authorities or professionals before making any decisions or taking action based on the FAQs or the news article.

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