Venture capital funding for Irish tech firms fell by 5% in the first half of 2019, though Q2 buoyancy indicates that a recovery may be underway.

That’s the main conclusion in a report by the Irish Venture Capital Association in association with William Fry.

Overall, VC investment in the tech amounted to €430m through H1 2019. Q2 investment was €233m, up 90% on Q2 2018. The report cautions that the period January to March 2018 yielded a particularly low figure.

IVCA chairman Neil McGowan (pictured) said: “While funding in the first half was down, it rebounded strongly in the second quarter compared to last year. It is vital to grow and encourage our indigenous base in an environment where we are probably over reliant on foreign direct investment."

In Association with

The number of companies raising funds increased by almost 50%, from 93 in the first half of 2018 to 139 to June this year. Software accounted for 45% of total funding, followed by life sciences at 25%. Fintech investments reached almost 10% of the total for the first time.

IVCA director general Sarah-Jane Larkin added: “Since the onset of the credit crunch in 2008, more than 2,500 Irish SMEs have raised venture capital and private equity of €5 billion.

“These funds were raised almost exclusively by Irish VC and PE fund managers who, during this period, supported the creation of up to 20,000 jobs and attracted over €2.5 billion of capital into Ireland. This supported the state’s investment through its agencies Enterprise Ireland and the Irish Strategic Investment Fund, and geared up investment through the Seed and Venture Capital Programme by almost 16 times.”

• Download: Who got how much VC through Q2 2019