Venture Capital funds invested into Irish SMEs reached a new high of €1.48 billion in 2024, or 9% up on the previous year, which itself was a record.
But deals right across all sizes below €5 million plummeted in 2024.
That’s according to the Irish Venture Capital Association (IVCA) VenturePulse report, published with William Fry.
The association also reported a record fourth quarter in 2024 of €535 million, 162% up on the same period the previous year.
However, deals in the €3 million-€5 million range fell by 37% to €82 million for the year, and by 56% to €17.6 million for the fourth quarter 2024, compared to the same period the previous year.
Funding in the €1 million-€3 million category fell by 24% to €105 million for the year and by 63% to €23.6 million for the quarter.
Investments below €1 million declined by 4% to €28.9 million for the year and by 19% to €7 million for the quarter. Seed funding, or first rounds raised by SMEs, decreased by 4% annually to €127 million and by 55% to €17.9 million in the quarter.
Gerry Maguire, chairperson, Irish Venture Capital Association, said: “Growth in the year and final quarter was driven by big investments which demonstrates that Ireland has the capacity to create and scale world class tech firms.”
However, he described as “choppy” the funding environment for firms looking to raise less than €5 million.
“Deals right across all sizes below €5m fell during 2024 and in quarter four,” said Maguire.
Artificial Intelligence (AI) accounted for over €100 million of the total VC investment into Irish firms last year.
Maguire said that the recent impact of Chinese operator DeepSeek is likely to increase, not decrease, appetite by VC investors in the sector.
“The arrival of players such as DeepSeek has the potential to boost margins and decrease development costs for AI start-ups,” said Maguire.
“We are potentially witnessing the democratisation and ease of participation by AI developers, in the same way that Software-as-a-Service or cloud computing transformed and disrupted the traditional software model.”
He pointed out that the DeepSeek driven sell off of Nasdaq stocks mostly affected big chip makers, or AI platforms of Google, Microsoft and others, not areas in which most Irish AI firms compete. “There is massive potential in AI applications across healthcare, climate, education and other sectors, and this will be boosted by lower costs of development which represents a major opportunity for Ireland,” said Maguire.
Sarah-Jane Larkin, director general, IVCA said that fourth quarter and annual data emphasised the potential for the new Government in Ireland to support investment in early-stage companies.
“AI company, Nuritas, for example, raised €42m in quarter four but its first round back in 2015 was just over €100,000,” said Larkin. “Co Louth based company, XOCEAN raised €115m in this quarter and is now a world leader in sea drone technology.”
She said that current global economic and political turbulence, largely driven by the new administration in the US, means that the Irish Government’s latest €250 million Seed & Venture Capital Scheme 2025-2029 “couldn’t come at a better time”, with applications for the first call of up to €100 million to be submitted to Enterprise Ireland by the end of this week (February 20).
“This is very welcome as funding for deals below €5m fell sharply across the quarter and the year,” said Larkin.
The top five deals in quarter four 2024 were: Dublin headquartered medical device company Fire1 (€116m); Louth based sea drone developer XOCEAN (€115m); Dublin headquartered travel software firm Nuitée (€46m); Dublin headquartered AI company Nuritas (€42m) and Dublin based fintech firm NomuPay (€35.9m).
Life sciences accounted for 37% (€552.9m) of the total raised in 2024, followed by Software on 13% (€185m); Envirotech on 11% (€161.7m); Fintech on 8% (€119m) and Data on 8% (€115m).
Overall, 217 deals were completed in 2024, similar to the previous year (216). “In view of global headwinds, we should be ambitious and aiming to double this,” added Larkin.