Irish VC Deals Plummet in Number and Value Due to the Disparity in Expectations of Investors and Founders

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In the first quarter of the year, venture capital (VC) investments in Ireland plummeted by 80%, accompanied by a sharp decline in the number of deals.

According to the latest Q1 ’24 Venture Pulse report, compiled by KPMG with data from PitchBook, the extent of the slowdown in the VC sector is evident. This decline is attributed to tightening financial conditions, resulting in decreased valuations and a market impasse where the expectations of company founders and potential investors are often significantly misaligned.

Globally, VC investment hit its lowest point in five years at the beginning of 2024.

Irish data reveals that 17 venture capital deals, totalling $34.19 million (€32 million), were completed in the first three months of this year. This marks a decrease from 24 deals worth $172.8 million in the same period of 2023.

The reported figures do not include Japanese investment giant SoftBank’s acquisition of a 51% stake in Cubic Telecom, led by Barry Napier, which values the Irish business at over €900 million. This deal, finalized in December 2023 and concluded on Friday, April 26, falls outside the quarterly results.

The largest deal of this quarter was a $7 million investment secured by Galway-based medtech firm Ceroflo for the development of a novel technology to treat intracranial atherosclerotic disease, a leading cause of stroke.

The following three largest deals by size were as follows: Dublin-based OOHPod, a smart parcel locker service, raised $5.9 million; Dublin-based MOBY Bikes, a bike-sharing startup, raised $3 million in equity funding through the Employment and Investment Incentive Scheme, which provides tax relief to investors; and another medtech company, Dublin-based Coroflo, secured $3 million in equity funding as it prepares for the production of its breastfeeding monitor this year.

Anna Scally, Partner and Head of Technology and Media at KPMG in Ireland, expressed that interest in Ireland’s technology companies remains relatively upbeat, despite the downturn. She highlighted opportunities for companies in the medtech, AI, and cleantech sectors, in particular.

Scally also noted that the European Parliament’s recently approved Artificial Intelligence Act could be enforced as early as the end of June. She anticipates that its effects will begin to be noticed within six months, with full implementation expected to take effect within 24 months.

Anna said further, “Companies will now have to factor the provisions of this Act into how they develop AI products and services to be rolled out in the European market.”

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