Venture capital investment in Northern Ireland tech firms reached an all-time high in 2022 as £139m was invested across 89 deals in local innovation and growth stage companies last year, according to data from Catalyst.
The combined value of transactions rose 29% from 2021 when £107m was invested across 68 deals and more than tripled the £44.3m figure from 2019.
The figures come after the failure of Silicon Valley Bank, one of the largest global lenders to venture capital-backed start-ups, which created significant uncertainty before the US government guaranteed deposits and HSBC bought the bank's UK arm.
Catalyst has tracked innovation investment in Northern Ireland since 2017, reviewing each investment to ensure the accuracy of reporting for Northern Ireland.
The significant jump in deal value this year reflects an increase in the number of established Northern Ireland companies who have turned to venture capital investment to support their growth plans.
In Association with
The average amount invested in each deal was £1.6m, an increase of £100,000 on the average funding round recorded in 2021.
Catalyst’s research also noted that there were 20 deals in the £1m to £5m range, 10 investments with a value of more than £5m, and five deals worth more than £10m.
Around £40m of the total investment came from Northern Irish sources, while 71% of the total sum invested came from parties based outside of Northern Ireland, demonstrating increased interest from international venture capital investors.
During the year funds such as Google Ventures, Barclays, Clean Growth Fund, ExSight Ventures, Visionary Ventures and SignalFire made investments in NI companies.
The growth in investment in Northern Ireland companies comes despite a 16% decline in investment across the UK, according to analysis from Beauhurst.
“In light of a fall in venture capital investment in the UK market overall, the increase in venture capital investment into Northern Ireland companies is very welcome," said Kieran Dalton, head of scaling at Catalyst.
"When we analyse the underlying data, we can see the cause of this increase has been the emergence of a cluster of growth companies which are redefining the aspirations for innovation companies within NI.
“Raising venture capital investment is always a challenge, however, as more Seed companies in NI continue to ‘graduate’ into Growth and Venture stages they can be confident that external investors are increasingly available to support their needs.”
Steve Orr, CEO of Catalyst, said: “These figures show that Northern Ireland companies continue to attract increasing amounts of international investment, even at a time when venture capital activity globally has fallen.
"The rise is testament to the quality of founders, start-ups, scale-ups and the strong local ecosystem that now exists here.
“Given the slowdown and ongoing pressures facing the venture capital market, which have been exacerbated in recent days by the uncertainty created by the rescue of the sector’s major banking player, Silicon Valley Bank, it will become increasingly important for local startups that global investors are aware this is a region and an economy that has a strong track record of producing innovative companies with high growth potential.”
Photo: (l-r) Elaine Smyth, director of entrepreneurship & scaling at Catalyst; Kieran Dalton, Catalyst’s head of scaling; and Pauline Timoney, COO of Automated Intelligence, one of the NI companies which raised investment in 2022.
