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Funding for Dublin-based companies has dropped significantly, while early-stage investments have reached their lowest level in six years.
Funding into Irish start-ups fell by roughly 40pc in the first half of 2023, according to a new report by TechIreland.
The non-profit’s latest Start-up Funding Review claims Irish start-ups only raised €460m for the first half of the year. Despite this, the report claims 112 companies raised funding, which is the highest amount seen “for many years”.
Like other reports on the fundraising market, TechIreland attributes the drop to issues in global markets, along with rising inflation, interest rates and a shift in investor sentiment.
The report also suggests that the number of early-stage investments have dropped significantly, down by 75pc compared to the first half of 2021 and reaching its lowest level in six years. Only 13 deals involved companies raising funds for the first time, while 14 deals had funding greater than €10m.
Various sectors saw their funding levels drop heavily in the first half of the year, with health-tech dropping by 70pc, fintech falling by 40pc and agritech dropping by 80pc. Investments into AI companies and impact innovators increased.
The report also claims that funding into Dublin-based companies fell sharply, but other regions managed to outperform. Galway saw €74m invested into 14 companies, while €67m was invested into nine Cork companies.
This continues a trend witnessed in TechIreland’s Start-up Funding Review for 2022, which saw Galway have its best year on record with 25 companies raising a combined €182m.
The biggest deal of the year was landed by Everseen in Cork, which raised €65m earlier this year, followed by Nomupay raising €50m. Other top deals included Dublin’s Neuromod Devices and Galway-based Vivasure Medical, which each raised €30m.
Enterprise Ireland head of growth capital Claire Carroll said the step back in investor activity has become “testing for all over the past few quarters”.
“It is critically important at times like this that there is a strong domestic base to protect our companies, and this is a key focus for Enterprise Ireland as we are both direct investors and support venture funds and business angels,” Carroll said.
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