Investment by venture capitalists in Irish tech start-ups and SMEs rose 44% to a record €1.3bn last year, according to the Irish Venture Capital Association VenturePulse survey, published today in association with William Fry. 

The total raised compares to €925m in 2020, with the surge powered by a number of eight- and nine-figure fundraising rounds for indigenous companies that saw them earn unicorn status.

The likes of home testing technology company Let's Get Checked (€123m), medical devices firm Mainstay Medical (€89m), fintech Wayflyer (€62m) and software analytics company Kitman Labs (€52m) helped Irish companies to a record fundraising year.

The strong momentum was reflected in figures for the fourth quarter when funding more than tripled year-on-year from €139m to €458m.

Commenting on the figures, Nicola McClafferty, chairperson of the Irish Venture Capital Association said: "The indigenous tech start-up and SME sector appears to be well positioned to benefit from and contribute to a strong post pandemic jobs recovery.

In Association with

"57% of funding in 2021 came from overseas investors, highlighting the continuing appeal of Irish tech firms and their ability to compete on a world stage." 

She added that the positive news was reflected in seed or first round funding, which is primarily locally provided, growing 60% in 2021 to €130.7m from €81.5m the previous year. The total number of deals also increased 20% from 233 to 279.

"The 20% increase in number and 44% rise in value shows that Irish tech SMEs are raising larger rounds," commented Sarah-Jane Larkin, director general, IVCA. "The largest category increase was in deals between €10-30m which rose to by 66% to €356m in 2021 compared to €214m the previous year."

In the fourth quarter, the number of deals rose by almost a third to from 54 to 71 compared to the final quarter of 2020.

Life sciences led the way in the fourth quarter raising 38% of funding (€174m). This was followed by software (17%); business services (12%); food and drink (11%); fintech (9%); ICT (7%); cyber security (1%) and other (6%).  

The only sector to decline in the fourth quarter was in the under €1m category which was down 35% as overall deal sizes increased. Deals in the €1-5m category were up by 151%, growing to €68m from €27m in 2020.

Seed funding more than doubled to €49m from €19m in the same quarter of 2020. There were increases in all other deal sizes, notably those over €30m which grew in value by more than 400% to €219.5m from €42m. 

"We have never witnessed such a wide range of sectors raising venture capital or private equity, reflecting the fact that Irish high growth SMEs are now more broadly spread and diversified than in the past," McClafferty added.

Photo: Nicola McClafferty, chairperson, Irish Venture Capital Association. (Pic: Fennell Photography.)