VC deal activity slows in Q1 with $125.4m invested in 24 deals

Latest figures show funding deals muted locally while European deals at record high

Flipdish co-founders Conor and James McCarthy: Its $48.4 million fundraise was the biggest VC deal in the first quarter. Photograph: Conor McCabe

Flipdish co-founders Conor and James McCarthy: Its $48.4 million fundraise was the biggest VC deal in the first quarter. Photograph: Conor McCabe

 

Venture capital activity slowed considerably in the Republic in the first quarter with $125.4 million (€104.3 million) invested in 24 deals, down from almost $500 million in the final three months of 2020.

While the first quarter is typically weaker in terms of activity, deal volumes in the first three months of 2021 were significantly slower than in other years. By comparison, a record $331.1 million in VC deals was recorded for the first quarter of 2018, with $139.8 million for the same period in 2019, and $171.6 million in Q1, 2020.

According to the latest Venture Pulse report from KPMG, companies that did secure investment in the first quarter were predominantly software developers offering solutions to companies and consumers in various industries from food and beverages to healthcare, financial services, automotive and construction.

The biggest deal locally was for food-ordering platform Flipdish, which secured $48.4 million in funding from Tiger Global, one of the US’s best-known investment firms.

Runny noses

Galway-based medtech company Neurent Medical’s $25 million fundraise for a device to provide relief for people suffering from a chronic runny nose was the second biggest transaction.

The other significant deals during the first quarter involved EasyGo, which raised $12.2 million, We.trade ($6.7 million) and CameraMatics ($4.9 million).

Other notable transactions in the period included a $4.5 million raise by GoContractor, a developer of a digital onboarding and subcontractor management platform designed for construction workers; a $4.3 million raise by TerminusDB, a spin-out from Trinity College Dublin which creates tools for managing and utilising data; and $3.6 million raised by Mirai Medical, a Galway-based medtech company pioneering an energy technology for use in the treatment of cancer.

‘Landmark deals’

“While it’s been a slow start to the year, a healthy amount of VC investment has still flowed into Ireland so far this year. Ireland’s investment numbers tend to be boosted by landmark deals and I expect to see more large deals close with Irish companies before the end of 2021,” said Anna Scally, partner and fintech lead at KPMG.

“What stands out for me is the breadth of sectors that Irish companies are developing innovative solutions for, particularly software-based solutions. It’s clear the pandemic-dominated environment has helped confirm their product market fit, and this bodes well for the future of the ecosystem here, as Irish companies aren’t hedging bets on any one industry,” she added.

While investment levels were weak locally, they reached a new record in Europe of $21 billion across 1,430 in the first quarter. Global VC investment totalled $126.9 billion across 6,508 deals.