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Irish companies raise over $655 million in VC funding

Irish raise over $655 million in VC funding in 2018

2018 was the second highest year on record for VC investment in Ireland.

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Kelli O'Malley

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KPMG in Ireland

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  • At least 167 VC deals closed in Ireland in 2018, up from 130 in 2017 and 151 in 2016
  • Pharma and biotech companies competing strongly with Iterum Therapeutics securing $80 million, Sublimity Therapeutics securing $64 million and Inflazome securing investment of $46 million
  • The Q4 2018 edition of the Venture Pulse report produced by KPMG analyses the latest global trends in venture capital investment data and provides insights from both a global and regional perspective. All figures cited are in USD; data for the report is provided by PitchBook
     

KPMG has published its Venture Pulse Q4 2018 report, tracking venture capital (VC) activity around the globe. Findings show another very successful year for Ireland, with over $655 million invested in Irish companies in 2018, with $188 million of that invested in the last quarter of the year. 2018 was the second highest year on record for VC investment in Ireland, lagging just modestly behind 2016 where a record high of $708 million was invested. At least 167 VC deals closed in Ireland in 2018, up from 130 in 2017 and 151 in 2016. Mean deal values in Ireland were up slightly in 2018 from 2017.

Commenting on the Irish findings, Anna Scally, Partner, Head of Technology and Media & Fintech Lead at KPMG in Ireland said:

“Overall, 2018 was another strong year for VC investment in Ireland, driven principally by significant investments in pharma and biotech companies. Companies in these sectors tend to require considerable funding to grow and scale. Well-funded Irish pharma and biotech companies are competing impressively on the global stage.”
Some of the notable deals in Ireland in 2018 were in the pharmaceutical space where Iterum Therapeutics secured $80 million, Sublimity Therapeutics secured $64 million and Inflazome secured investment of $46 million.

Healthcare was also an important sector securing VC interest with GC Aesthetics, Fire1 and WhiteSwell securing $97 million, $48 million and $30 million respectively.

Other companies that interested investors this year included Mark Cummins’ Pointy which raised $12 million, Ben Harris’ Drop Kitchen which raised $8 million and Jack Donaghy’s Roomex.com which raised $9 million.

Fintech also proved popular with raises by Future Finance ($49 million), Solgari, Supply Finance and AQ Metrics.

Irish Times 2017 Innovation Awards Winner, Kastus, raised $3.5 million and online bookings platform Phorest raised $23 million. DecaWave raised a further $30 million.

Europe sets third consecutive annual record for VC investment

Small increase in Q4’18

The report found that Europe set a third straight record for annual VC investment, attracting $24.4 billion in VC investment over 2018. Deals volume in Europe, however, fell considerably over the course of the year – from 4,607 deals in 2017 to 3,380 in 2018.

Investment quarter-over-quarter was also strong in Europe, with a small increase from $5.6 to $5.9 billion between Q3 and Q4’18.

The global picture

Globally, the report found that 2018 finished with a record high of $225 billion invested globally.

In Q4, Global VC investment rose to more than $64 billion, boosted by a record $12.8 billion funding round by US based e-cigarette manufacturer, Juul.

While every region identified in the report — the US, Americas, Asia and Europe — saw a record high level of annual VC investment during 2018, the total number of VC deals globally declined to a 6 year low of 15,299 deals during the year, compared to 17,314 in 2017 and a peak high of 20,172 in 2015.

The drop in quarterly deal volume was even more stark, with the 3,048 deals seen in Q4’18 the lowest number in 25 quarters since Q3’12.

Key Q4’18 Highlights

  • Irish VC investment in Q4 ’18 was over $188 million.
  • Global VC investment rose from $56 billion in Q3’18 to more than $64 billion in Q4’18.
  • In Q4’18, the US set a second consecutive record for quarterly VC investment accounting for $41.8 billion.
  • The $12.8 billion Juul deal also set the record for the largest VC deal ever in the US. In addition to the deal, the US saw one other $1 billion+ funding round: a $1.25 billion raise by Epic Games.
  • VC in Asia dropped significantly this quarter, from $17.6 billion in Q3’18 to a seven-quarter low of $15 billion during Q4’18. Despite the decline the region saw four $1 billion+ deals, including China-based ByteDance ($3 billion), Singapore-based Grab ($2.85 billion), Indonesia-based Tokopedia ($1.1 billion), and India-based Swiggy ($1 billion).
  • European VC investment rose slightly, with $5.9 billion raised in Q4’18 compared to just over $5.6 billion in Q3’18. Europe’s largest deal this quarter was a $200 million Series D raised by UK-based Graphcore.

Future less certain heading into 2019

Given the extraordinarily strong year for VC investment in the US, Asia and Europe, including the two largest VC deals in history, 2018 investment levels will be tough to match in 2019. However, there will likely continue to be substantial VC investment globally, particularly in late-stage deals. Autotech – whether autonomous vehicles, alternative energy vehicles, or ride hailing - is expected to see strong investment, in addition to healthtech and fintech. On the technology front, artificial intelligence is also expected to see strong growth.

Looking at the year ahead, KPMG’s Anna Scally added:

“The IPO market will be one area to watch as several massive unicorns, including Uber and Lyft, prepare for IPOs despite the unexpected turbulence in the capital markets at the end of 2018. And focusing back on Ireland and our near neighbours, the UK, it remains to be seen whether investors will remain confident or will the uncertainty caused by Brexit will impact the 2019 investment figures.”

*All figures are in US dollars.
 

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