INVESTMENT
IT deals fuel rise in Irish VC investment
17-02-2006
by
Venture capital investment in Ireland saw a significant rise in the last quarter of 2005, with the IT sector playing a leading role in the increase.
The latest Ernst & Young/Dow Jones VentureOne Quarterly European Venture Capital Report showed that overall investment for the last quarter rose to EUR30.58 million -- EUR8.64 million more than in the previous quarter.
Investment in IT accounted for all of the deals done during the quarter, of which there were four. The EUR30.58 million invested in IT represents a sizeable increase over the EUR11 million invested in the fourth quarter of 2004. However, the total volume of deals decreased significantly from last year, down to four in the most recent quarter from nine in the last quarter of 2004.
Garry O'Rourke, senior manager at Ernst & Young Ireland, said that the figures for the last quarter of 2005 are significantly reliant on a small number of large deals. "[The year] 2005 was a steady year for investment in the Irish market, with the overall amount invested showing an increase in comparison to 2004 and 2003. IT continues to be a strong performing area for Ireland, in contrast with its decline across Europe."
Investment in Ireland during 2005's fourth quarter was dominated by two large deals: the EUR14 million first-round funding raised for Irish TV station Channel 6, and a EUR10 million round for Silicon & Software Systems (S3), which designs integrated circuits and embedded software solutions.
In contrast with the IT sector, the healthcare industry was left looking decidedly less robust than in the year's first three quarters, with no investment at all in the last quarter of 2005.
For the year as a whole, Ireland's venture capital investment was up 13 percent -- in sharp contrast to the rest of Europe, which experienced a 5 percent drop in investment to EUR3.6 billion and a 16 percent fall in the number of financing rounds to 1,020.
Ireland's venture capital investment total for the whole of last year was EUR124.35 million, compared to EUR109.72 million in 2004. The fourth-quarter figure of EUR30.58 million is significantly higher than the amount invested during the previous year's final quarter, when venture capitalists ploughed EUR20.17 million into the country.
In line with the rest of Europe, Ireland experienced a decline in the number of first and seed round financings in 2005's final quarter -- down to only one deal compared with two in the same period in 2004. Across Europe, the number of deals dropped to a total of 80 first and seed round financings, in comparison with 102 in the same period in 2004.
In Europe, the UK remains the most active country for investment, although deals were down 9 percent and capital was down 11 percent to EUR1.04 billion. Ireland ranked 12th for the number of deals, equal with Spain and behind the Netherlands and Norway. Going by the amount raised, Ireland was in tenth place in the rankings.
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