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Total venture capital (VC) investment in Irish companies dropped to $764 million (€706m) across 101 deals last year, but both the value of activity and volume of deals was significantly lower than the year before, according to the latest KPMG Venture Pulse report.
Annual Irish VC investment plunged to a four-year low, with the value of activity falling 34 per cent compared to the level seen in 2022, when there was 122 such investments worth a total of $1.16 billion.
KMPG said 2023 had been a “very challenging year” for the VC market globally, with factors including geopolitical uncertainties, high interest and inflation rates and ongoing valuation concerns combining to make investors cautious.
It said in the fourth quarter 26 VC deals involving Irish companies were agreed, with these worth almost $174.8 million.
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Global VC investment fell from $531.4 billion across 51,894 deals in 2022 to $344 billion across 37,808 deals in 2023, with the fourth quarter a “particularly soft” one for the market. Global investment of $74.9 billion in the final quarter of the year was the lowest level recorded since the second quarter of 2019.
Europe experienced the sharpest decline in funding, with VC investment dropping from $18 billion in the third quarter of last year to $13.8 billion in the fourth. Similarly, annual VC investment in Ireland fell to levels not seen since 2019 as investors remained wary.
Several companies attracted solid funding rounds, however, including Shorla Oncology, an Irish-founded healthcare start-up that develops pharmaceutical therapies to help cancer patients, which raised $35 million in Series B funding.
EasyGo, Ireland’s largest private car-charging network provider, raised $32 million, and LUMA Vision, a developer of a novel four-dimensional (4D) cardiac imaging and navigation platform, raised $22 million in Series A3 funding.
“Despite the significant challenges faced across the globe, VC investment in Ireland was reasonable in 2023. Investors are still willing to back innovative companies with market-leading technology and market opportunity. Investors are also willing to invest in key sectors, including AI, cleantech and life sciences,” said KPMG partner Anna Scally, who heads technology and media for the professional services giant in Ireland.
In light of the ongoing conflicts in Europe and the Middle East, the continued lack of exit opportunities for VC-backed companies and uncertainties related to some upcoming elections, VC investment is expected to remain relatively soft in the first quarter of 2024.
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