Friday, May 24, 2024

Value and number of Irish venture capital deals nosedive as expectations of founders and would-be investors fail to match

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The latest figures from the Q1 ’24 Venture Pulse report produced by KPMG with data from PitchBook show the scale of the slowdown in the VC sector, where a fall in valuations as financial conditions have tightened has led to deadlock in markets where expectations of company founders and would-be investors are now often significantly mismatched.

Globally, VC investment fell to its lowest point in five years at the start of 2024.

The Irish data shows that 17 venture capital deals worth a combined $34.19m (€32m) closed in Ireland in the first three months of this year. That was down from 24 deals worth $172.8m in the same period of 2023

The figures don’t capture Japanese investment giant SoftBank’s acquisition of a 51pc stake in Cubic Telecom in a deal that values the Irish business, led by Barry Napier, at over €900m. SoftBank agreed that deal in December 2023 and it closed on Friday, April 26, so falls outside the quarterly results.

This quarter’s largest deal was $7m raised by Galway-based medtech firm Ceroflo for its development of a novel technology for the treatment for intracranial atherosclerotic disease, a leading cause of stroke.

The next three biggest deals by size were Dublin-based OOHPod, a smart parcel locker service, which raised $5.9m, Dublin-based MOBY Bikes, a bike-sharing start-up, which raised $3m in equity funding through the Employment and Investment Incentive Scheme, which offers tax relief to investors and another medtech, Dublin-based Coroflo, which raised $3m in equity funding as it prepares for production of its breastfeeding monitor this year.

Anna Scally, partner, head of technology and media at KPMG in Ireland, said interest in Ireland’s technology companies remains reasonably positive, despite the slowdown, citing opportunities for companies in the medtech, AI and cleantech areas in particular.

The European Parliament’s recently agreed Artificial Intelligence Act could come in as soon as the end of June, she said, and its impact will start to be felt within six months, with full implementation taking effect within 24 months.

“Companies will now have to factor the provisions of this Act into how they develop AI products and services to be rolled out in the European market.”

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