Record number of early-stage Irish start-ups raised funding in 2022

Thanks to Enterprise Ireland supports such as the Pre-Seed Start Fund, more young start-ups are raising funding now than ever before.

TechIreland has published its latest Startup Funding Review for 2022 and things look good for early-stage start-ups and companies based outside Dublin.

Irish start-up funding had its third consecutive year of staying above a billion, with total funding last year standing at €1.3bn. While this is lower than the €1.6bn raised in 2021, it is the second highest figure on record – even in terms of the number of companies that raised funding.

As expected, global macroeconomic headwinds left their impression on start-up funding. Investment in Irish start-ups dropped by 19pc and the number of start-ups that raised funding dropped by 5pc, the report found.

However, young start-ups founded within the last three years had a record year in terms of the total number of early-stage start-ups that raised funding in 2022. The report notes that this is largely because of supports from Enterprise Ireland, such as through the Pre-Seed Start Fund.

According to the TechIreland report, the top 10 biggest investments accounted for more than half the total value of funding. The top three companies were Wayflyer (€226m), Flipdish (€87.2m) and TransferMate (€66m).

TransferMate is also one of four companies in the top 10 that are not based in Dublin. The report found that funding into Dublin start-ups dropped by a third from €1.2bn to €800m between 2021 and last year.

Meanwhile, Galway has its best year on record with 25 companies raising a combined €182m. Overall, a total of 14 regional companies each raised more than €10m last year.

“The Irish start-up ecosystem is robust. For the first time, over 140 early-stage start-ups fundraised, up from 96 in 2021,” said John O’Dea, CEO of TechIreland.

“It is encouraging to see that early-stage supports by Enterprise Ireland, NDRC, HBAN and third level continue their strong support for early-stage tech entrepreneurs, paving the way for a new generation of start-ups and Irish innovation.”

Fintech and security on the rise

The picture in the north is not as promising, where funding appears to have decreased substantially from €80m to €50m. Belfast start-ups account for nearly all the funding raised in Northern Ireland.

There was a slight improvement in the amount of funding raised by women founders, with 72 women-led start-ups having raised a total of €234m last year. This is slightly higher than the €230m figure in 2021.

Sectors that saw an increase in investment include fintech, security and clean-tech, while health-tech saw a 44pc drop. Other sectors where investment reduced are enterprise solutions, e-commerce and consumer products (which fell by a whopping 80pc).

“US venture capital investment in H2 2022 dropped by a staggering 54pc compared to H2 2021 and expectations are that the current quarter will be no better,” said Brian Caulfield, chair of Scale Ireland.

“Meanwhile in Europe, investment was down 25pc compared to 2021. So Ireland and Europe seem to be weathering the downturn rather better than other regions so far.”

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