Thursday, May 30, 2024

Level of Irish deals plummets as venture capitalists remain cautious

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The level of private investment deals into Irish firms plummeted in the first three months of the year as venture capitalists stayed cautious amid a volatile overall economic environment.

There were 17 venture capital investment deals in the period, worth around €31.7m, plunging 80% from €166m across 24 deals a year earlier, according to the latest Venture Pulse report published by professional services firm KPMG.

Anna Scally, head of technology and media and partner at KPMG Ireland, said investors remain interested in medtech, AI, and cleantech companies “despite a very slow start to the year”.

Galway-based medtech firm Ceroflo secured the largest amount of investment in the period, with €6.4m for the development of a technology that will be used to treat a leading cause of stroke.

The next three biggest deals by size were Dublin-based OOHPod, the parcel locker service, which raised €5.4m; Dublin-based bike-sharing start-up Moby Bikes, which raised €2.8m in equity funding through the Employment and Investment Incentive Scheme (EIIS) which offers tax relief to investors; and Dublin-based medtech company Coroflo, which raised €2.8m in equity funding for production of its breastfeeding monitor.

Chloe Brown, chief executive of Ceroflo, which secured €6.4m for development of a technology that will be used to treat a leading cause of stroke. Picture: Andrew Downes

The report also showed that a range of start-ups attracted venture capital funding in Ireland already this year, albeit at relatively small deal sizes.

The level of private investment has come down from a high at the end of last year when Japan-based SoftBank bought a majority stake in the Dublin-based software company Cubic Telecom for €473m. Cubic Telecom reached a valuation of €900m following the deal.

Ireland fell in line with the global trend of falling venture capital investment. Europe was the only region to see venture capital investment increase this year, according to the report. However, the number of deals declined by 621, suggesting investors are becoming increasingly picky about which companies they are willing to bet on.

Meanwhile, investors could be spooked further this year with artificial intelligence and sustainability regulations coming down the track for firms.

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