Ireland’s Emerald Isle is quickly becoming a destination of choice for many tech startups, with promising figures showing that investment into Irish SMEs has gone over the €1 billion mark in the first nine months of 2022. This demonstrates really healthy growth within the country’s tech sector and is set to give a big boost to Ireland’s economy.
With strong ties both to the US and UK, as well as being an EU and Eurozone member, Ireland has all the right tools to help foster its own tech ecosystem. There is no better example of this than Dublin – Ireland’s capital city and current hub of all things start-up related. The city holds plenty of opportunities for organisations worldwide through its pool of top tech talent and relationships that are just waiting to be nurtured.
The Irish tech scene is rapidly on the rise, as demonstrated by its strong government initiatives, robust venture capital and angel investors, and top digital city score. With over 80% of the world’s major tech players like Google, Facebook, LinkedIn, AirBnb and Amazon’s headquarters in Ireland, it’s truly a global hub for these innovative juggernauts.
Moreover, SMEs plus startups have also benefited greatly from the country’s growth as shown by the €1 billion drawn in funding over the course of the first nine months of 2022 – a leap of 25% since last year. Ireland certainly appears to be paving the way for true innovation with this technological revolution- taking off like never before.
The Irish Venture Capital Association VenturePulse survey offers invaluable insight into the state of equity funding for Irish SMEs. Spearheaded by the Irish Venture Capital Association, a representative organization for venture capital and private equity firms, this data also covers SMEs headquartered on the island of Ireland.
According to Leo Hamill, chairperson of the association, “Given the current state of affairs,” the survey results “look more favourably compared to Europe, in which funding year-over-year for the third quarter fell by 35% and nine months later by 44%.” This is incredibly promising news and shows just how resilient Irish SMEs have proven to be in times of great economic tumult.
No Signs of Slowing Down
Ireland’s tech scene shows encouraging signs of growth according to a recent report. With venture capital being an essential part for any thriving tech scene, Ireland proves that its tightened purse strings are not enough to keep up the momentum.
Data from Q3 2022 disclosed an increase of 34% in VC funding to SMEs totaling €309 million. The leading sectors – cybersecurity and fintech – respectively raised 28% each of the total funds.
While the figures show high hopes for both mentioned fields, it is crucial to analyze more closely the data; excluding two massive deals of €30+ million (Fonoa and Tines), green funding processes have witnessed a decreased down to under €10 million, with an exemption of seed funds.
The third quarter of 2021 showed some remarkable data regarding venture funding in Ireland, with a 54% decline of deals between €5-10 million and a 41% decline of deals under €1 million. According to Sarah-Jane Larkin, director general of the Irish Venture Capital Association, this was likely due to uncertain economic times that have been seen globally.
Despite this, there is encouraging news among seed funding – the initial investment saw an increase of 45% to €44.8 million compared to the same quarter in 2020, and a 13% increase when measuring the year-long period. These figures indicate that there is still much potential within Irish startups and businesses.
Sarah-Jane says that these statistics show that Ireland is performing extremely well in Europe when it comes to seed funding. This is thanks in part to independent funds such as ACT, Delta, Furthr and Lightstone Ventures who are making technology-focused investments at the seed stage.
The Irish Government’s €90 million Irish Innovation Seed Fund is an additional supportive measure which has provided start-ups with invaluable assistance to grow their businesses. Data from the 6 months prior shows a drop of 29% quarter over quarter and 20% for the year in regards to seed funding across Europe, however, Ireland’s dedicated and strategic investment into the industry has seen the country rise above this decline.