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KPMG predicts that Q2 of 2023 will be another challenging time for VC investment. Last year also saw reductions in VC spending here, a previous report claimed.
The latest quarterly Venture Pulse report by KPMG indicates that venture capital investment in Ireland has taken a significant knock, with investment down by 57pc this quarter compared to Q1 of 2022.
According to the report, 24 VC deals closed in Q1 of this year, worth a combined total of $172.8m.
While that figure was down by more than half compared to the same quarter of 2022, the overall VC investment picture for 2022 was similarly negative. KPMG’s previous quarterly Venture Pulse report, released in January of this year, claimed that VC investment in 2022 was down by 38pc.
KPMG is not predicting positivity for the coming financial quarter either.
Anna Scally, partner and head of technology and media at KPMG Ireland, said that Q2 of 2023 “will likely be another challenging quarter for VC investment in Ireland and VC investors will likely remain cautious, scrutinising deals carefully to assess whether business models will be resilient, while also putting more pressure on their portfolio companies to cut costs.”
However, the report was not totally negative. Scally predicts that investment will continue in “high priority areas” such as medtech, energy, cybersecurity, cleantech and ESG.
Scally also pointed out that based on the findings from Q1 of 2023, a fairly diverse range of start-ups attracted VC investment in recent months. Many of these deals were relatively small.
The biggest deal from this quarter was the $32m (€30m) raised by the Galway-based medical device company Vivasure Medical.
The next biggest deal by size was the $25m raised by the Dublin-headquartered medtech company Fire1.
Other notable deals in recent months include digital pathology company Deciphex which raised $16m; social media tracking and predictions company NewsWhip’s $13m; and cybersecurity company Siren’s $12m.
Scally said that a positive takeaway from the last quarter was that there has not been “a complete drop off in early-stage deals”.
“Notwithstanding the inherent risks and uncertainty about the future, VCs realise they still need to invest in early-stage companies. Otherwise, they risk missing out on the next wave of growth companies.”
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