Female Founders Remain Resilient While Overall Funding Drops
11th September 2023
TechIreland recently published its Startup Funding Review for the first half of the year. It is a sobering read.
With turbulent times in global markets, higher inflation, rising interest rates and a shift in investor sentiment, valuations and the pace of fundraising are under pressure.
Total funding raised at €460 million was down significantly, a 40% drop on the first half of last year.
However, 112 companies fundraised, which is the highest for many years.
The number of early-stage rounds continued to drop, down 75% from H1 2021 and down 80% from H1 2019.
Funding decreased in most sectors compared to last year; Healthtech (down 70%), FinTech (down 40%), AgriTech (down 80%), Enterprise Software, a sizable cluster, was down 50%. Cleantech dropped 70% albeit the number of cleantech companies increased sharply.
Funding into Artificial Intelligence and Impact Innovators increased. However, funding into SaaS – the largest cluster tracked by TechIreland – dropped 70%.
“A stronger government response is needed; Ideally, the announcement of a new Seed and Venture Capital Scheme with an enlarged budget together with improved incentives to drive angel investment,” said Brian Caulfield, Chair at Scale Ireland. “It’s an essential investment in Ireland’s future that will deliver a return to the state over time.”
Funding into Dublin companies dropped sharply.
“The outlook for the global economy is challenging,” said Juliet Passmore, Dublin City Council. “Dublin will have to work hard to maintain its success as a tech startup and scale-up city.”
Regions outside Dublin performed better – the second best funding on record, and the number of companies was up on last year. Galway outperformed (€74m into 14 companies) as did Cork (€67m into 9 companies).
Female Founders remain resilient, with €66m raised by 16 companies, the second-best performance in the last several years.
“The State plays a key role, via the tax code, in encouraging productive investment in Irish startups and scale-ups,” said Gillian Buckley, Western Development Commission. “The easier we can make it for companies and investors to avail of the likes of EIIS the better.”
The Top 10
The top 10 largest investments included – Cork’s Everseen (raised €65m), Nomupay (raised €50m), Neuromod Devices and Galway-based Vivasure Medical each raised €30m, followed by Fire1, StrongRoots, SuperNode and AssureHedge – all raising between €15m and €30m. While these large numbers highlight the ability of our companies to scale globally, they underline how little went into early-stage investments.
An additional set of large investments went into environment/cleantech companies; Amarenco (€300m), JOLT Energy (€150m) and Weev (€58m). These outliers are not included as they are for infrastructure rather than technology, nevertheless, it is impressive that Irish companies are attracting such large investments.
Responding to TechIreland’s Funding Review for the first half of 2023, John O’Dea, TechIreland’s Chief Executive said: “This review underlines the challenges. However, with new supports from Enterprise Ireland, Ireland Strategic Investment Fund, NDRC among others, I do believe that the best years for the Irish tech community are still ahead.”
