Venture capital invested in small and medium-sized enterprises (SMEs) in the tech sector here fell 58 per cent in the first quarter of the year, new figures show.
But that came off the back of a strong start to 2025, when Irish companies raised a record of more than half a billion euro.
The Irish Venture Capital Association VenturePulse survey found Irish SMEs raised €221.7 million in the first three months of the year, with international investors accounting for the bulk of the capital raised at 85 per cent.
“This is glass half full territory, as it once again highlights our exposure to overseas investment, but also emphasises the appetite for quality Irish tech firms, despite unprecedented spending on AI in the US,” said Caroline Gaynor, chairperson, IVCA.
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Funding fell in most deal categories during the year, with the exception of investments under €1 million.
Investment in deals worth between €3 million- €5 million were down by more than three quarters to €7.9 million, while deals worth between €5 million and €10 million dropped 62 per cent to €16.5 million.
The top deal during the period was Neurent Medical at €62.5 million, with Aerska in second place at €33 million, both in the life sciences and biotech sector.
Cybersecurity company Evervault raised €21 million, with fintech Circit and XFuel rounding out the top five.
Although AI accounted for the bulk of venture capital investment globally in the the first quarter of the year, in Ireland it was life sciences that lead the way. It accounted for 54 per cent, or €119.5 million, of the total invested, with fintech following at 13 per cent and software at 12 per cent.
AI represented 2 per cent of the total invested, but director general of the IVCA, Sarah-Jane Larkin, noted that the survey classifies companies by core industry. With AI embedded in products and services, it could understate the scale of investment in AI.
Addressing concerns about the impact of the Iran war on investor confidence, Ms Larkin said the impact could be softened by policy initiatives.
“Ireland is a small market subject to global geopolitical headwinds. But local policy initiatives may mitigate against this to the benefit of early stage Irish start-ups looking to raise funding this year,” she said. “For example, Enterprise Ireland has raised its direct investment limit from €250,000, and we should see the benefits of the Government’s €250 million Seed and Venture Capital Scheme 2025-29 start to feed through this year.”
