Investment by venture capitalists in IT firms increased by 19 per cent to €162 million in the first nine months of the year, according to figures published yesterday by Ion Equity.
The venture capital group said the third quarter of this year had been weak - as is traditional - because many key players were away for the summer period. The figures are included in the quarterly Techpulse survey circulated by Ion.
The overall verdict of the survey is that venture capital funds are now as plentiful as they were in the period before September 11th, 2001.
Almost €25 million of fundraising took place in the third quarter of 2005, up slightly from the same period in 2004 when the total was €23.2 million. While Ion said the quarterly increase was encouraging, the second quarter of this year was far stronger with €59.9 million raised.
"This decline from the second quarter of the year is a typical seasonal factor reflecting fewer deal closes in the summer months," said Ion equity director Ulric Kenny.
The biggest investments in the third quarter were Emuse Technology which raised €5.7 million from a consortium of international investors. The online trading firm Marrakech also managed to secure €4.5 million in funding.
Several smaller companies, including Celtrak, Eblana Photonics and Vordel, each raised about €1 million during the quarter.
Ion said it was interesting to note that about 50 per cent of the fundraising this quarter was with existing investors.
The survey said one of the key investors in the Irish market at present was Cross Atlantic Partners. It invested in nanotechnology firm Ntera and also took part in the €4.5 million fund-raising by Marrakech.
The Irish based venture capital outfit 4th Level Ventures was also very active in the third quarter, investing in Selatra, EMF Systems and PXIT. Most of these fundings were relatively small - less than €2.5 million each.
Other venture capital investors active in the third quarter were Enterprise Ireland, ACT Venture Capital, Delta Partners, Doughty Hanson, Evolution Beeson Gregory, Elderstreet Capital and Powerscourt Capital.
Mr Kenny said the Irish venture capital climate remains strong, particularly for IT companies.
