Tech funding on the rise in 2007

27-03-2008

by Deirdre McArdle

Despite the current economic uncertainty investors are ploughing money into Irish tech firms with over EUR80 million invested in the final quarter of 2007.

That's according to the latest Techpulse survey from the Irish Venture Capital Association, which shows that venture capitalists invested EUR84.4 million in Irish technology companies in the fourth quarter of the year, up significantly from the EUR30.1 million invested in the same period in 2006.

In all, 2007 was a productive year for tech investment with EUR225.94 million raised during the period; 17 percent ahead of 2006 and the highest level since 2002.

The number of companies that raised funds in the final quarter of 2007 was 32, compared to just six in the same period in 2006. The amount of cash raised ranged from EUR50,000 to EUR40 million. During 2007 105 companies raised funds, more than double the 43 that received funding in 2006.

The increasingly high-profile drug delivery and medical device sector attracted significant investment during the year with six companies in the sector raising EUR4.6 million between them. During the same period in 2006 investment in this sector was non-existent.

Telecoms firms continue to be an attractive proposition for venture capitalists with five companies in the sector raising EUR5.4 million, compared to one firm receiving EUR2 million in 2006. The remainder of the funds, EUR74.5 million, was spread between 21 other technology firms in the areas of nanotechnology, fibre optics, photonics, and semiconductors focusing on industries such as bio, pharma and environmental.

As to where the funding came from: 17 Irish-based venture capital funds and 12 international funds contributed during the final quarter of 2007. In the same period in 2006 just three Irish VCs and three international funds were involved. The high proportion of international funding is promising and reflects Ireland's growing reputation as a tech hub, according to Regina Breheny, general, IVCA.

The results of the survey come ahead of an IVCA workshop, which aims to advise Irish tech firms on how to raise venture capital. This workshop will be held in Dublin on 15 May.