TechIreland publish their mid-year report on Irish startup and tech funding.

by Startacus Admin

The latest Funding Review from TechIreland reveals that Irish Startups raised €746M in the first-half 2022 but early-stage rounds have dropped to a five-year low.

Today, TechIreland published their H1 2022 Funding Review. The report shows that 91 Irish startups between them raised €746.2 Million in the first half of the year. This is 20% lower than the same period last year, but 2021 was an exceptional year. This year's first-half funding compares well with other previous years. 

The €746M total is skewed by a few large rounds; the top three outliers took 40% of the total. The remaining 88 companies between them raised €440 M. As in previous years, most of the capital inflow into Irish startups and scaleups went into larger, more established companies.  The number of investments over €10M increased to 18 from 16 last year.

Conversely, there was a drop in smaller rounds. Of particular concern is the fact that rounds less than €500K (mostly seed and pre-seed) fell to the lowest level in 5 years.

The invasion of Ukraine and the consequent spiralling energy costs and inflation are inevitably reducing valuations for high-risk companies. While the outlook for later-stage investments and exits is likely to remain challenging - IVCA, reported a 50% fall in funding from overseas investors in the second quarter, down to €152M from €303M in Q1. However, local funds are well equipped to support quality startups.  

The top 10 funded companies in H1 2022 include Wayflyer (€134M), Flipdish (€87.2M),TransferMate Global Payments (€66M), ProVerum Medical (€30M), Energyx (€30M), &Open (€26M), Keelvar (€23M), Perfuze (€22.5M), Vivasure Medical (€22M) andWorkVivo (€20M). 

It is encouraging that five of the top 10 in the list are tech companies outside Dublin. It is a standout year so far for Galway, with 11 companies raising €98M.  Nine Cork-based companies raised a total €68M. Success stories such as these, not to mention TransferMate Global Payments from Kilkenny, are great examples of companies scaling from the regions. Overall, forty-two companies from the regions raised a total of €253M in H1. It was also a promising first half for Northern Ireland-based companies. 

In terms of sectors, HealthTech and eCommerce recorded a sharp drop in funding, whereas FinTechs registered a rise, largely driven by WayFlyer and TransferMate. Other sectors that performed well are AgriTech and CleanTech. 

Female-founded startups are enjoying a record year with €114M invested into female-founded companies, the best first half-year performance on record - twice what was raised in the past two years and nearly six times as much as was raised in H1 2018. 

Every year, it is noted how large outliers skew overall figures.  While this year has seen impressive large rounds and a good number of ‘growth’ rounds (€10M to €50M), the poor number of early-stage rounds so far this year raises a concern about the pipeline of companies likely to scale in future. 

Responding to the Review, John O'Dea, CEO, TechIreland said, "The €90M Irish Innovation Seed Fund will be a vital support for Irish startups at a time when early-stage funding is cooling". 

Brian Caulfield, Chair at Scale Ireland added, "Given the environment, it’s remarkable that Irish H1 funding numbers have held up so well. The macroeconomic picture is a challenging one.

Interested in a little more detail and reading the full report? You can download the full TechIreland H1 2022 Funding Review now and do just that.

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Published on: 22nd September 2022