Venture capital funding into Irish SMEs in the second quarter fell to its lowest level in ten years, according to a survey from the Irish Venture Capital Association (IVCA).
The results show funding plummeted to €112.6m, from €494m in the same quarter last year. This is the lowest figure the IVCA has recorded since the second quarter of 2015.
As a result, funding in the first half of the year fell by 14% to €645.5m from €752.7m the previous year, the VenturePulse survey published in association with William Fry found.
“The fall off would have been worse if not for a record first quarter 2025, which saw an increase of over 100% to €532.8m compared to the same period last year,” Caroline Gaynor, IVCA chairperson, said.
She added that the quarterly result was largely explained by an 81% pullback by international investors, which invested €69.5m in the quarter, compared to €375.3m the previous year, a shortfall of over €305m.
“This is a timely warning sign for Ireland and highlights the need for us to stand on our own feet in terms of funding and backing for our brightest and best indigenous start-ups, instead of depending on volatile international support,” she said.
The life sciences sector with €255.3m (40%) led the way in funding for the half year, followed by cybersecurity (18%); fintech (14%); software (9%); and AI & machine learning (8%).
Sarah-Jane Larkin, director general, IVCA, said that bearish international sentiment was reflected in quarter two deal sizes. “There was only one deal (Nomupay) in the €30m+ category, compared to five last year. Funding fell by 88% to €37m from €300.3m.” There was also only one deal in the €10m+ category (Kota), down from six rounds last year. Funding fell by 87% to €12.4m from over €100m.
“In an increasingly isolationist global economic market, it is more important than ever that we are not dependent on international capital or sentiment and have the capacity to fund our own indigenous winners,” she said.
The IVCA has welcomed a recent Government report which found ‘there is a need for future intervention to improve the supply of scaling finance’, stating the survey data emphasises the urgency of the situation.
