Funding for start-ups plummet as VCs focus on later-stage companies.

Venture capital funding for start-ups collapsed last year even as overall investment for companies rose by over €100 million, new figures show.

venture capital

Deals under €5 million fell by almost a third to €194 million from €285 million as VC firms focused their spending on later stage companies.

Overall investment in Irish small and medium-sized companies grew 13 per cent to €925 million with funding in the €5 million to €10 million range doubling to €204 million. Deals priced over €10 million were up almost a third to €568 million compared to 2019.

Six companies raised over €30 million in 2020, double the number who did so a year earlier.

With a greater concentration of cash going into fewer companies, the overall number of rounds fell by 18 per cent to 233 last year, as against 285 deals in 2019.

Irish Venture Capital Association (IVCA), which compiled the figures said there is a growing concern that early stage companies are finding it increasing difficult to raise funds.

During the fourth quarter in particular, deals under €5 million fell by half to €41 million from €82 million a year earlier.

“It is vital that we nurture the pipeline and indigenous stars of the future. We won’t have successful high growth firms raising €5 million plus in three years if entrepreneurial companies are starved of early funding now,” said IVCA chairwoman Gillian Buckley.

The latest figures indicate a softening in the market during the final three months of 2020 with funding down 45 per cent to €139 million from €253 million in the fourth quarter of 2019.

Life sciences accounted for over a third of all funding deals last year at €332 million, having grown from just 4 per cent of the total in 2004. Software companies raised a combined €269 million over the year, equivalent to 29 per cent of all deals with fintech accounting for €115 million or 12 per cent of total transactions.

Source: Irish Times

Share

JOIN OUR MAILING LIST

Contact Us

South East BIC CLG.
Unit 1B, Industrial Park
Cork Road, Waterford
X91 DT38

Tel: +353 51 356300 

Registered Charity no. 20036706


 

Social Share

Our Partners

  •    
       
     
  •   
  • Halo Business Angel Network
    EI
    certified
    dept business interegg

        




     
  •       
  •        

 

 

We use cookies to improve our website and your experience when using it. Cookies used for the essential operation of the site have already been set. To find out more about the cookies we use and how to delete them, see our privacy policy.

I accept cookies from this site.

We use cookies to improve our website and your experience when using it. Cookies used for the essential operation of the site have already been set. To find out more about the cookies we use and how to delete them, see our privacy policy.

I accept cookies from this site.