'Urgency' warning as funding for SMEs plummets
Figures released yesterday (7 September) show that venture-capital (VC) funding for Irish small and medium-sized businesses fell to its lowest level for ten years in the second quarter (Q2) of this year.
According to the Irish Venture Capital Association (IVCA) VenturePulse survey, published in association with law firm William Fry, funding plummeted to €112.6 million from €494 million in the same quarter last year.
This was the lowest quarterly figure the IVCA has recorded since Q2 of 2015 and meant that funding the first six months of the year dropped by 14% to €645.5 million.
‘Volatile’ international funding
IVCA chair Caroline Gaynor said that the first-half fall-off would have been worse, if not for a record first quarter, which saw an annual increase of over 100% to €532.8 million.
Gaynor attributed the quarterly result largely to an 81% pull-back by international investors, who invested just €69.5 million in the quarter, compared with €375.3m a year earlier.
“This is a timely warning sign for Ireland and highlights the need for us to stand on our own feet in terms of funding and backing for our brightest and best indigenous start-ups, instead of depending on volatile international support,” she said.
The life-sciences sector attracted 40% of total funding in the first half of 2025, followed by cyber-security (18%), fintech (14%), software (9%), and AI and machine learning (8%).
Fall-off in all deal sizes
Sarah-Jane Larkin (director general, IVCA) said that gloomy international sentiment was reflected in Q2 deal sizes, with only one deal worth more than €30 million, compared with five in the same quarter last year.
“There was a fall-off in all deal sizes, with the exception of those under €1 million,” added Larkin. “Seed funding, or first rounds by SMEs, fell by over a half to €25.5 million.”
She added that the IVCA welcomed a recent Government report that found a need for “future Government intervention” to improve the supply of scaling finance.
“This new data emphasises the urgency of the situation,” Larkin concluded.