The latest KPMG Venture Pulse report showed a rebound in VC activity in Ireland in Q4’20, with $422.6 million invested in 27 deals involving Irish companies – an increase from the $118.2 invested in Q3’20. In total in 2020, $970 million was invested in 226 deals involving Irish companies, compared with $561 million across 242 deals in 2019. The investment levels for 2020 are the second highest on record, next to 2018 when $1,305.2 million was invested in Irish companies.

Globally, the picture is also positive with VC-backed companies raising $80.8 billion globally across 5,418 deals in Q4’20. Despite the backdrop of the COVID-19 pandemic, the US presidential election, Brexit negotiations and trade tensions between the US and China, last year was the second biggest year for VC funding in a decade, next to 2018, with $300.5 billion recorded, up from $281.6 billion in 2019.

Commenting on VC activity in Ireland, Anna Scally, Partner and Fintech Lead at KPMG in Ireland said: “Despite the global pandemic, the VC market in Ireland remained very robust in 2020. There were a lot of transactions in the pipeline coming into 2020, and many companies got funded in Q1 and Q2.  After a dip in Q3, we’ve seen excellent activity to the end the year. The Covid-19 pandemic has also likely accelerated investment for some companies, with technology, healthcare and medtech companies consistently featuring in the top 10 for the most investment secured. Investors also remain keen on the green agenda, evidenced by the standout deal secured by Amarenco late last year.” 

“The bigger picture, however, is a real cause for concern. While established companies are attracting big investments in sectors that are already coping quite well, it’s clear that not enough investment is going to early stage companies, which could affect future deal activity. When early stage companies don’t receive funding, they will not be capable of scaling up and securing follow-on investment, which will have a significant longer-term impact.”

“As the vaccine roll-out continues, we hope to see a recovery in confidence amongst private investors for earlier stage investment in Irish companies across a broader range of sectors.” 

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If you have any venture capital queries, please get in touch with Anna Scally, our Fintech lead.

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