Republic hit by slowdown in venture capital cash

VENTURE capital funding has slumped in Ireland, with a falloff in major deals and seed funding, according to new figures.

Investment was down by almost a third to €546m (£486m) in the first nine months of the year, confirming a significant slowdown on 2017.

The drop-off accelerated during the year, with the amount raised by tech firms and startups in the last three months just half what it was last year.

The figures, collated by the Irish Venture Capital Association (IVCA) and law firm William Fry, suggest the largest segment to see a decline is deals above €5m (£4.45m).

These have fallen in value and volume by around 30%, according to the IVCA report.

This year has not seen the same number of headline-grabbing funding deals as 2017, with the exception of the €110m landed by Dublin-based Intercom.

Seed funding, which helps start-ups, has also fallen compared to last year.

“Seed funding accounted for 23% of the total funds raised in the third quarter,” said Sarah-Jane Larkin, director general of the IVCA.

“The decline in seed funding is being driven by the volume of deals, which is down 32%.”

Ms Larkin said international investors accounted for €300m (£267m or 58%) of the venture capital cash raised in the first nine months of the year

Irish venture capital firms have recently complained about rules that limit their ability to raise money from institutional funds.

A number of investors and business owners have also begun lobbying for greater tax breaks aimed at tech entrepreneurs and their staff.