Irish companies: 2nd highest level of 2020 VC investment Irish companies: 2nd highest level of 2020 VC investment Irish companies: 2nd highest level of 2020 VC investment

• 27 VC deals closed in Ireland in Q4’20, worth $423 million
• Sustainability, technology and healthcare companies attract biggest backing
• Rebound in investment levels from Q3 dip
• Risk of earlier stage companies being left behind
• The Q4 2020 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 Q4’20 report, tracking venture capital (VC) activity around the globe. Findings show 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 where $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.

The top 5 deals closed in Q4’20 in Ireland include:

1. Amarenco ($190.7 million) – Cork-based solar power company secured the largest backing, to fund its ambitions to have more than 1GW of projects under construction in the coming months and 3GW by 2023 in Europe, APAC and the Middle East.
2. Immedis ($50 million) – a specialist provider of enterprise technology solutions for global payroll and mobility tax services to multinationals.
3. SynOx Therapeutics ($43.6 million) – A clinical stage biopharmaceutical company developing emactuzumab to improve the lives of patients with tenosynovial giant cell tumours.
4. Priothera ($35.3 million) - Developer of receptor modulators intended to improve the lives of patients suffering from hematological malignancies.
5. TechMet – ($25 million) - Operator of a private industrial firm intended to strengthen the global metal supply chain for technology metals.

Other notable deals included a $12.3 million raise by medical technology company Neuromod; $10.2 million raised by E-commerce financing and marketing analytics start-up, Wayflyer; and a $10 million raise by Corlytics, a global leader in regulatory monitoring, obligation management and regulatory risk analytics.

Other Irish medical companies were successful in raising funding in Q4’20 including Cork-based Solvotrin Therapeutics ($8.1 million); Galway-based ONK Therapeutics ($8 million); Dublin-based HealthBeacon ($6.5 million); and Galway-based Venari Medical ($5.3 million).

In the food and beverages sector, Kildare-based health drinks company, The Native Collective, raised $7.1 million. The company recently expanded its product offering to include a non-alcoholic beer, which replaces alcohol with a trademarked blend of Beta Glucan, complex B vitamins and polyphenols.

Commenting on VC activity in Ireland during Q4’20, 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.” 

• Global VC investment remained strong quarter-over-quarter, despite a drop from $83.2 billion across 6,168 deals in Q3’20 to $80.8 billion across 5,418 deals in Q4’20.The Americas accounted for more than half of VC investment globally during Q4’20, with $41 billion of investment across 2,725 deals. Of this amount, the US accounted for $38.8 billion across 2,526 deals.
• VC investment in Europe set a second straight quarterly record, with $14.3 billion raised across 1,192 deals, compared to $13.8 billion cross 1,473 deals in Q3’20.
• VC investment in the Asia-Pacific region remained strong, rising slightly from $24.5 billion in Q3’20 to $25.2 billion in Q4’20.
• China accounted for the top five largest VC deals in the world during Q4’20, including Manbang Group ($1.7 billion), Zuoyabang ($1.6 billion), Yuanfudao ($1 billion), Yungwang Wandian ($907.1 million), and Enovate Motors ($735.85 million).

• Global VC funding in 2020 was $300.5 billion – up from $281.6 billion in 2019 and second only to 2018’s record $329.7 billion despite a drop in deal volume.
• Annual VC investment in the Americas reached a record $164.3 billion during 2020, including an annual record high of $156.2 billion in the US. Annual VC investment in Europe also saw a record of $49.0 billion during the year.
• Global median deal sizes rose across all deal stages in 2020 – to $1.2 million for seed/angel deals, $4.5 million for early stage deals, and $9.9 million for later stage deals.
• Global median pre-money valuations rose across Series A and higher rounds during 2020, including to $525 million for Series D or later rounds, compared to $410 million in 2019. Other global median pre-money valuations were $22 million for Series A, $70 million for Series B, and $180 million for Series C deals. Global median pre-money valuations for Seed stage deals held steady at $6 million between 2019 and 2020.
• Global first-time venture financing dropped for the third straight year – to $24.9 billion across 6,580 deals in 2020 from $29.4 billion across 8,149 deals in 2019.