Bumper Year For Venture Capital Investment

02 Feb 2021 | 03.54 pm

Bumper Year For Venture Capital Investment

But early stage companies losing out, warns KPMG

02 Feb 2021 | 03.54 pm

Venture capital funding in Ireland finished strongly in 2020, with c.€350m invested in 27 deals in the fourth quarter. According to KPMG’s latest Venture Pulse report, the Q4 VC total investment figure was more than triple that of the previous quarter.

In total, almost €810m was invested in 226 deals involving Irish companies through 2020, compared with €466m across 242 deals in 2019. KPMG noted that the VC investment levels for 2020 are the second-highest on record, bettered only by the 2018 totals.

Among the top VC deals closed were the €150m fundraiser for Cork solar power company Amarenco and the c.€42m ($50m) raised by Terry Clune’s payroll solutions provider Immedis.

Anna Scally (pictured), partner and fintech lead at KPMG, commented: “There were a lot of transactions in the pipeline coming into 2020, and many companies got funded in Q1 and Q2. After a dip in Q3, we’ve seen excellent activity to the end the year.”

Scally added that the pandemic likely accelerated investment for some companies, as technology, healthcare and medtech businesses consistently featuring in the top 10 for the most investment secured.

However, Scally warned that the bigger picture in the VC landscape is a cause for concern. “While established companies are attracting big investments in sectors that are already coping quite well, it’s clear that not enough investment is going to early stage companies, which could affect future deal activity.

“When early stage companies don’t receive funding, they will not be capable of scaling up and securing follow-on investment, which will have a significant longer-term impact.

“As the vaccine roll-out continues, we hope to see a recovery in confidence among private investors for earlier stage investment in Irish companies across a broader range of sectors.”

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