From AI to medtech, venture capital is fuelling innovation, job creation and growth, but experts warn Ireland needs stronger domestic players and more international investment to stay competitive.
Venture capital (VC) is a powerful driver of Ireland’s economic transformation, accelerating business growth, diversification and the creation of high-value jobs. By backing Irish entrepreneurs, VC not only offers attractive returns to investors but also strengthens Ireland’s competitive advantage and future proofs the economy.
“Venture capital is a form of private equity that focuses on early-stage, fast-growing companies,” explains Alan Merriman, chief executive and co-founder of Elkstone. “Instead of investing in public markets, you’re putting money into young businesses where there’s more uncertainty but potentially much greater upside. It’s about helping founders succeed and having an impact by backing innovation at the earliest stages.”
In return for capital, VC investors usually receive an equity stake and often play a role in shaping the company’s strategic direction, says Grit Young, EY Ireland partner and lead for technology, media and telecoms. “VCs often bridge the funding gap for highly innovative companies that are not yet commercially successful and don’t have the collateral to raise money from banks or private equity.”
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Venture capital fuels the creation and expansion of innovative businesses, which drives productivity, competitiveness, and exports, says Young. “Capital enables start-ups to scale, invest in R&D, and enter new markets – activities that might otherwise be out of reach. As a result, VC-backed companies tend to experience accelerated growth and contribute significantly to job creation.”
Merriman points to Enterprise Ireland’s long-running Seed and Venture Capital Scheme. “These companies often employ 20 to 30 people early on, which can grow rapidly. Let’s Get Checked, for example, now employs more than 1,000 people. Start-ups drive innovation, new technologies, and high-quality jobs. A single job in a start-up can lead to four more across the wider economy. Venture capital also future proofs Ireland by funding areas such as AI. If we don’t foster home-grown strength in these sectors, our competitiveness will suffer in the long run.”
The impact extends beyond technology, he adds. “Ireland has had strong success in medtech, cybersecurity, fintech, software and gaming. The spread of VC-backed companies is diverse and not just Dublin-centric, which is good for the wider economy. Regional hubs benefit too, as more entrepreneurs build businesses outside the capital.”
Opportunities for Irish entrepreneurs to secure venture funding have never been greater, says Young. “A robust ecosystem exists, featuring domestic and international VC funds, accelerators, and support from State agencies like Enterprise Ireland. Networking events, pitch competitions and incubator programmes also give founders exposure to investors and guidance on scaling their ventures.”
The Irish VC community has matured significantly over the past 10 to 15 years, Merriman agrees. “That said, the global economy is more challenging right now, and much of the available capital now flows to the largest US funds, which tend to back US companies. That means the domestic economy here will matter even more going forward. We need strong local VC players, while also attracting more international capital. There’s still a lot of work to do.”
Access to seed funding has improved considerably. “Ten years ago, it was very difficult but now there are more funds and players active at this stage,” Merriman says. “Later-stage funding – series A, B, and C – is still more challenging in an Irish context, but Elkstone and others are planning to provide more in this area.
“There are more doors to knock on now, but the pool is still modest. For example, 25 companies recently shared around €100 million. That’s progress, but we need to do much more a to keep pace with global peers and ensure Irish founders aren’t forced abroad for growth capital.”
Venture capital-backed start-ups scale quickly, enabling them to enter new markets and invest in research and development, notes Young. “This typically translates into the creation of high-value jobs in technology, engineering and other knowledge-intensive sectors. Well-funded start-ups also stimulate local economies by supporting supply chains, service providers, and further entrepreneurial activity.”
Merriman highlights the multiplier effect: “High-growth companies can scale revenues or headcount by 50 to 200 per cent per year. These businesses create highly skilled jobs, and because of the one-to-four multiplier effect of job creation, the wider impact is significant. The knock-on effect extends to communities, suppliers and even Ireland’s global reputation as a place for innovation.”
For Ireland to stay competitive, further investment will be crucial. “This is a critically important sector, and we need stronger domestic players as well as international co-investors,” Merriman says.
