TechIreland report shows pressure on start-ups to secure funding continues
Geopolitical instability, inflation, rising interest rates and changes in investor sentiment have combined to see a continued reduction in funding and valuation for start-ups, according to the latest TechIreland Startup Funding Review.
The report found that total funding had experienced a 40% decline on the first half of 2022 to €460 million. However, 112 companies fundraised, the highest for many years.
The number of early-stage rounds continued to drop, down 75% from the first half of 2021 and down 80% from the same period in 2019.
Funding decreased in most sectors compared to last year: healthtech (down 70%), fintech (down 40%), agritech (down 80%) and Enterprise Software (down 50%) all suffered. Funding for cleantech dropped 70% albeit the number of companies in the sector increased. Funding into Artificial Intelligence increased, however software-as-a-service dived by 70%.
Regional performance outside Dublin was the second best funding on record. Galway outperformed the capital with €74 million invested in 14 companies, as did Cork with €67 million invested in nine companies).
Female founders fared well with 16 companies raising €66 million, the second-best performance in the last several years.
The top 10 largest investments included Cork’s Everseen (€65 million), Nomupay (€50 million), Neuromod Devices and Galway-based Vivasure Medical each raised €30 million, followed by Fire1, StrongRoots, SuperNode and AssureHedge – all raising between €15 million and €30 million.
John O’Dea, TechIreland chief executive (pictured), said: “This review underlines the challenge [facing start-ups]. However, with new supports from Enterprise Ireland, Ireland Strategic Investment Fund, NDRC among others I do believe that the best years for the Irish tech community are still ahead.”
Brian Caulfield, Chair at Scale Ireland, added: “A stronger government response is needed. Ideally, the announcement of a new Seed and Venture Capital Scheme with an enlarged budget together with improved incentives to drive angel investment. It’s an essential investment in Ireland’s future that will deliver a return to the state over time.”
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