TechIreland Startup Funding Review

15th April 2024

Posted In: The Topic

TechIreland has published their Startup Funding Review on investments into Irish tech startups last year.

John O’Dea, TechIreland’s Chief Executive said: “The Irish startup ecosystem has great supports for early stage tech. Significant work is being done by Enterprise Ireland, LEOs, NDRC and HBAN to build a strong pipeline.

But we also need to focus on developing home-growth funds that can support larger scaling companies.”

Funding into Irish startups dropped to €847 Million, down from €1.6 Billion in 2021 and €1.3B in 2022. This is disappointing, but it largely reflects broader trends as global startup fundraising dropped 38% last year. The drop in funding was mainly due to a decrease in later stage rounds, which rely more on foreign investors.

Sarah Jane Larkin of the IVCA commented:

“The decline in funding for larger round sizes highlights the risk of our highly innovative indigenous firms hitting a brick wall just at a critical time in their growth trajectory due to the lack of locally sourced scaling finance.

This is an issue we simply must correct if our most innovative companies are to assume their rightful position in global markets.”

On the positive side, a record 403 tech companies on the island were funded, a 44% increase in the number of deals – a good indicator of the health of our ecosystem.

The increase in the number of rounds was due to the large number of early stage investments. Seed to Series A rounds held up, with an increase in €1M to €5M deals.

Growth capital in global markets is more expensive. In TechIreland’s recent Pulse Survey, Irish tech companies said valuations have dropped and this was their top challenge.

Last year, the number of deals over €5M dropped to 28 from 48 the previous year, and the total value of investments also fell 45%.

The top 10 investments comprised less than 45% of the total, a big reduction on previous years.  Cork based Everseen raised €65M, followed by Belfast based Weev and Dublin’s Ocuco each raising €60M. Four companies from outside Dublin feature on the top 10, which include Tipperary’s Shorla Oncology (€32M) and Galway based Vivasure Medical (€30M).

In 2023, for the first time – Cleantech investments topped the sector table surpassing HealthTech, FinTech and Enterprise Solutions, which are traditionally the top sectors in Ireland.

While it is encouraging to see an increase in money flow to renewable energy, the downside is the more than 50% drop in funding for HealthTech, FinTech and Enterprise which make up more than 60% of all tech companies on the island.

Regions outside Dublin accounted for less than 30% of the funding raised, a drop on previous years. While the number of startups increased from 127 to 147 last year, the total raised fell to €222M from €502 raised the previous year.

It was a record year for Northern Ireland with €117M raised, up from €50M the previous year. And the number that fundraised went up from 20 in 2022 to 35, six of which were from outside Belfast.

Irish tech companies with a woman founder raised €93M in 2023, a drop from the previous years’ record of €230M. However, Ireland still ranked number 1 in Europe for supporting women-founders with the highest number of investments per capita, and we were in the top 10 in Europe for deal value.