Angels could invest €85m in Irish start-ups after ‘record-breaking year’

Angel investors could plough €85 million into Irish startups over the next five years, benefiting more than 260 enterprises, according to HBAN, the all-island Halo Business Angel Network.

The investment would mark a 79 per cent increase over the preceding half-decade, when almost €48 million was invested in 244 companies. The organisation also said it expected to see an additional €145 million in matching funds from public, private and international funders.

The prediction comes after what the organisation said was a record-breaking year for business-angel investment in Ireland, as 50 companies shared €13.6 million in angel funding, with a further €20.5 million from other public and private funds.

Among the industries expected to benefit are ICT, enterprise software, medtech, food and beverages, fintech and agritech.

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“These forecasts are based on the growth we have seen in angel investment over the past five years. They clearly demonstrate a very strong and growing appetite for investing in start-up companies. In an international environment where low-risk investment receives minuscule or even negative returns there is an increasing interest in balancing investment portfolios with higher-risk seed investments,” John Phelan, national director of HBAN, said.

“What we have seen recently is that the number of businesses receiving investment isn’t changing dramatically, but the amount of capital that angels are injecting into those businesses is increasing considerably. This reflects the quality of company that angels are presented with through HBAN. We only introduce angels to companies that we are confident are investor ready and have the potential to scale.”

About two-thirds of the value of investments comes from 10 per cent of Irish angel investors – an overwhelmingly male-dominated sector, according to HBAN. Three-quarters of investors are members of syndicates, and 80 per cent have started at least one business of their own; almost a third have started three or more businesses.

HBAN is a joint initiative of InterTradeIreland and Enterprise Ireland set up to promote business-angel investment on the island of Ireland.

“In HBAN we are actively seeking to increase the number of business angels who take a broader portfolio approach to investing. This is proven to increase the chances of positive overall returns and thus increases the appetite for return investing,’ Mr Phelan said. “Business angels are increasingly important to the start-up economy. Institutional investors, such as venture capitalists, can create a funding gap because they are reluctant to commit funds to very early-stage businesses. Business angels bridge that gap while also bringing their own expertise and knowledge to the table, providing start-ups with the best supports possible to make their business a success.”

The research was carried out for HBAN by SQW in 2016.