The Irish startup ecosystem has demonstrated its power by raising nearly $1 billion over the course of 2016 a new report from the Irish Venture Capital Association (IVCA) shows. Emerald Isle tech startups raised a congruent €888 million in venture capital over the course of the year, 38 percent of which from 11 companies alone.
“The figures demonstrate the continuing attraction of Irish tech firms by international investors,” IVCA Chairman Michael Murphy offered in a press release. “International syndicate investors, working with local venture capital firms, invested €548m in 2016 compared to €294m in 2015.”
The feat is all the more remarkable because US fundraising actually declined 13 percent according to the NVCA and went down 4 percent in the UK according to Pitchbook. It’s a 70-percent jump over the €522 million Irish startups raised in 2015. The IVCA says 221 different companies raised money, a major jump over 2015’s final tally of 165 companies and 2014’s number at 142. As is trending elsewhere, institutional VC cash is taking up a larger piece of the pie. Eighty-five percent of deals came from such outfits as opposed to 60 percent back in 2011.
“The life sciences sector was the star performer in 2016 with 52% of funds raised,” IVCA Director General Regina Breheny commented. “The life sciences sector in Ireland is showing signs of maturity and is benefiting from the state’s investment in R&D through Science Foundation Ireland.”
All that is well and good, but the most disconcerting part of the report is in the details. For the sixth consecutive year, seed deals have made up a smaller share of the pot.
Otherwise, the report paints a rosy picture for the Republic, including on the seed fund front.
“The good news for start-ups is that at €70 million for the year to end December, seed funds are now exceeding the peak levels of 2014,” Murphy added, noting that since 2008, some 1,400 startups in the country have raised €3.5 billion, with about 50 percent of it coming from abroad. But that does not emphasize the sheer growth in international investments Ireland saw in 2016.
International VC money constituted about 60 percent of all funds raised over the course of the year. To put that in perspective, domestic and international VC funding into Ireland’s startups each constituted between 30 and 40 percent of funding in both 2012 and 2014.
“Funds raised from International investors increased 8 fold from €65m in 2011 to €548m in 2016 i.e. 62% of the total funds raised. This reflects the calibre of Irish entrepreneurs and their technology capabilities,” the report read.
There were a number of highlights for Ireland in 2016. Fintech software company Circle scored €53m in the first half of the year, Future Finance €23.75m, and healthtech company Oneview took home €40m. Funding slowed in the final fourth of the year, however. Software sales company Qstream scored over €14 million in a fourth quarter round while other late bloomers were Opsona (€15m), environmental tech company Urban Volt (€30m), fintech star CurrencyFair (€8m), and CRM startup Field Aware (€4m).
2016 was marred by the loss of Web Summit to Lisbon, Portugal, a story which became a point of acrimony as some in the local startup community thought it was overemphasized in the press. Indeed, the Irish startup economy is far stronger than Portugal’s and may grow further in 2017.
Ireland potentially stands to benefit from the move of foreign workers in all IT sectors and European branches of international financial institutions out of post-Brexit Britain to other European countries, with English-speaking Ireland at the top of the prospect list. Potential restrictions on immigration to the US or other EU countries like Sweden also might create an opportunity for Irish companies to recruit.