Ireland’s Startup Scene Faces Funding Setback with Global Investment Decline
Dublin: Recent figures released by the Irish Venture Capital Association reveal a significant decline in global funding for Ireland’s start-ups, particularly impacting medium-sized enterprises valued at over £5 million. In the final quarter of last year, global funding dropped by 17 percent, from €245 million to €204 million.
This downturn has also had repercussions on tech funding in Ireland overall. While there was a modest 2 percent increase in tech funding over the course of a year, totaling €1.35 billion, the decrease in funding for medium-sized enterprises was evident. Notably, two-thirds of the total global funding in 2023 went to tech SMEs, with eight companies securing €745 million of the €1.35 billion.
Enterprises valued between €5 million and €10 million bore the brunt of the decline, experiencing a funding decrease of at least 50 percent, plummeting from €65 million to €32 million. This downturn also affected start-ups valued between €10 million and €30 million.
According to the association, deals ranging between $5 million and $10 million saw a 26 percent decrease in 2023 compared to the previous year. Seed funding, however, saw a positive trajectory, with a notable 58 percent increase recorded.
Despite these challenges, funding for smaller deals under $5 million witnessed growth. Ventures between $3 million and $5 million saw a 36 percent increase in funding, while there was a remarkable 170 percent surge in funding for ventures between €1 million and €3 million, reaching €63.7 million. Additionally, there was an 8 percent increase in deals under $1 million.
Over the past six months, there has been a sharp decline in venture funding for tech start-ups in both Ireland and globally, with global funding dropping from €963 million to €394 million in the second half of the year.
Notable funding deals during this period include investments in EV charger company Easy Go (€30 million), life-science firm Luma Vision (€20 million), and software firms Clouds Myth (€10 million) and Alvirus (€5.5 million), as highlighted by IVCA Chairperson Denise Sidhu.
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