Irish technology companies raised €26.6m in the first quarter of 2010

Irish technology companies raised €26.6m in the first quarter of 2010, a drop of 50% on the same period last year, according to the Irish Venture Capital Association (IVCA) Venture Pulse survey.

“While this is disappointing, the positive news is that the number of companies raising funds (32) is the same,” commented John Tracey, chairman, IVCA and CEO, TVC Holdings plc. “Individual activity has kept up but average deal size has fallen.”

This is partially reflected in the fact that first round funding was 39% of funds raised, compared to 30% in the first quarter of 2009. “While early stage funding has held up, we would be concerned that Government cutbacks at Enterprise Ireland may endanger this later in the year,” added Regina Breheny, director general, IVCA. Amounts raised in the first quarter ranged from €100K to €4m.

Commenting on the decline from last year she said that quarterly comparisons can be distorted by individual large rounds. “While average deal size has fallen by approximately 30% to €850K, expectations are that activity levels and deal size will pick up as the year progresses. There are indications that the cycle is starting to turn in the US.”

The IVCA Venture Pulse survey measures funding raised from domestic and international venture capital funds, from AIB and Bank of Ireland seed capital funds, Enterprise Ireland and from private investors including angels.

The survey shows that Irish venture capital firms provided 38% of the funds raised in the first quarter with 42% coming from abroad. “It is not always appreciated the importance of early local VC involvement in attracting larger international investment in later rounds,” added Ms Breheny.

Summary:
SECTORS
In the Pharma/Biotechnology sector, one company raised €750K.
In the drug delivery and medical device sector, four companies raised €6.1m.
In the telecoms sector, two companies raised €790K.
In the environment technology sector, five companies raised €2.6m.
In other technology (including nano technology, fibre optics, photonics and semiconductor chips) servicing a wide range of industries, four companies raised €1.5m.
In the business services sector, 13 companies raised € 11.1m.
Other – three companies raised € .7m.

SEED/EARLY STAGE
In this quarter 15 companies raised €0.3 (39% of funds raised).
In first quarter 2009 12 companies raised €15.9m (30% of funds raised).
In first quarter 2008 six companies raised €7.6m (18% of funds raised).

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