Overall venture capital funding into Irish firms fell by 20% to €136m through Q3 2019 compared to last year, according to the IVCA VenturePulse survey published in association with William Fry.

The number of deals of more than €10m fell by 40% in Q3, but this was offset by an increase of 36% in seed funding and deals below €10m.

For the first nine months of 2019, total VC funding increased by 3.7% to €566m,. In the third quarter, VC funding declined overall by 20%, falling to €136m.

The Irish Venture Capital Association said that seed funding in the third quarter is up 30% on the same period last year. And the number of companies which have raised seed funding this year has nearly doubled.

• Download details of Venture Capital investments Q3 2019

In Association with

Director general Sarah-Jane Larkin said there had been a decline in the proportion of funding coming from overseas investors, with a fall of 60% for the quarter and 40% in the year to date.

“This is due to the decline in the number and amount of investment in larger funding rounds. Major overseas venture capital investors are less attracted by deals below €10m, which have characterised the Irish market this year,” she stated.

Larkin added that the reduction in overseas investment emphasised the need to introduce policy initiatives to unlock greater local private sector funding into domestic innovative companies.

“While they remain an important player in the Irish market, as a nation we should not be overly dependent on overseas investors but create the environment locally to create Irish multinational companies.”

Software accounted for one-third of funding in Q3. A surprising entry in the top three was food and drink at 26%, partly due to a number of whiskey firms raising funds, including West Cork Distillery (€15m), Nephin (€2.5m) and Chapel Gate (€1m). Life sciences accounted for 14%.

Photo: Sarah-Jane Larkin and IVCA chairman Neil McGowan