Irish Venture Capital Investment Rises In 2006

by Jason Gorringe, Tax-News.com, London

30 July 2007

Venture capital investment in Ireland continued to increase in 2006, with funds supported by Enterprise Ireland investing EUR67m in the year, an increase of EUR17m on 2005.

Launching Enterprise Ireland’s Seed and Venture Capital Report for 2006, Feargal Ó Móráin, Executive Director, Enterprise Ireland and Chairman of the Enterprise Ireland Seed and Venture Capital Committee, revealed that EUR32m was invested in initial “first time” investments, with EUR35m invested in follow-on investment in companies that had already received funding. This brings total investments by Funds supported by Enterprise Ireland for the Seed and Venture Capital Programme 2001-2006 to EUR250m. Over 37% of the total investment was made in companies outside of Dublin.

Welcoming the report, Minister for Enterprise, Trade and Employment, Micheál Martin, TD, stated that:

“The Venture Capital Sector has made a significant contribution to the success of many SMEs and the continuing increase in venture capital activity in Ireland is to be welcomed. The sector provides a vital source of funding for early stage and growing Irish companies. Over the coming months we can look forward to the establishment of several new Funds under Enterprise Ireland’s EUR175m Seed and Venture Capital Programme 2007-2012.”

Ó Móráin noted:

“2006 represented a strong year for the Venture Capital sector in Ireland. A dynamic and healthy venture capital market is a prerequisite for the growth and development of high potential start-up companies in Ireland. Enterprise Ireland will continue to support SMEs through investment in seed and venture capital funds and also through Enterprise Ireland’s broad range of business development and financial supports.”

The sectoral breakdown for the 2001-2006 Venture Capital Programme shows that cumulative investment by value to year-end December 2006 was as follows:

• 55% in Software;
• 16% in Life Science sectors;
• 24% in the Communications sector;
• 5% in the Food, Manufacturing and other sectors.

2006 also saw continued increases in the amount of follow-on investments being made by venture capitalists.

Enterprise Ireland has been involved in three Seed and Venture Capital Programmes to date, commencing with the 1994-1999 Programme, a Programme from 2000-2006, and the current 2007-2012 Programme.

Under the 2007-2012 Seed and Venture Capital Programme, Enterprise Ireland is investing EUR175m in a new round of venture capital funding, which will leverage an estimated EUR1bn for investment in start-up, early stage and development stage businesses.

The EUR30m AIB Seed Capital Fund announced on July 2nd 2007, is the first new fund to be established under the 2007-2012 Programme. AIB and Enterprise Ireland are equal partners in the fund, each investing EUR15m. A number of further announcements establishing new funds will be made over the coming months.

Recommended