IVCA VenturePulse Survey, Ireland — 25 Feb. 2010

But Concern Expressed that Future Early Stage Funding may Suffer in Government Cutbacks

Irish companies raised €288m in 2009, up 18.6% on the previous year according to the Irish Venture Capital Association (IVCA) Venture Pulse survey.

“This strong performance was against a backdrop of a severe credit crunch and global banking crisis,” commented John Tracey, chairman IVCA and CEO, TVC Holdings plc. He said that the record year in Ireland compared with significant falls in activity levels of between 50-70% in US and UK markets which were back to levels experienced in the late 1990s.

The IVCA VenturePulse survey measures funding raised from domestic and international venture capital funds, from AIB and Bank of Ireland seed capital funds and Enterprise Ireland and from private investors including angels.

Funds raised in 2009 of €288m compared to €242.9m in 2008 and €225.9m in 2007. The 18.6% increase last year followed a rise of 7.5% in 2008.

Regina Breheny, director general of the IVCA, added that first round funding in Ireland represented 25% of funds raised. “In order to promote and develop the Smart Economy these high levels of first round funding for seed and start-up companies must be maintained.”

She expressed concern that Government spending cuts at agencies like Enterprise Ireland could inhibit the emergence of future innovative companies. “It would be a false economy as research shows that these companies grow faster, hire more graduates and export more than other indigenous firms.”

She added that Irish software firms will have the opportunity to network and learn how to raise funds at the IVCA/ISA Software Investment Forum on April 15th.

The number of companies that raised funds in 2009 was 139 compared to 93 in 2008 and 82 in 2007.

In the fourth quarter Irish companies raised €68.5m from investors in the three months to December 2009. This compares with funds raised of €68.6m in the same period of 2008 and €84.5m in 2007. 16 Irish based venture capital funds and private investors were involved (93 investments) and 16 international funds (16 investments).

SECTOR SUMMARY - 2009

In the drug delivery and medical device sector, 18 (13%) companies raised € 37.9m (13%).
In the telecoms sector, 11 (8%) companies raised € 22.3m (8%).
In the Pharma/Biotechnology sector, 11 (8%) companies raised € 81.9m (28%).
In the environmental technology sector, 13 (9%) companies raised € 27.7m (10%).
Other technology (including nano technology, fibre optics, photonics and semiconductor chips) servicing a wide range of industries, 27 (19%) companies raised €65.5m (23%).
In the business service sector, 37 (27%) companies raised €30.8m (11%).
Other 22 (16%) companies raised €21.9m (8%).

SEED/EARLY STAGE

In the fourth quarter of 2009 26 companies raised €22.9m (33% of funds raised). In 2008 18 companies raised €33.6m (49% of funds raised). In 2007 three companies raised €4.8m (6% of funds raised).

For the year 2009 65 companies raised €71.2m (25%). In 2008 32 companies raised € 51.1m (21% of funds raised). In 2007 nine companies raised €13.2m (6% of funds raised).

Regina Breheny, Director General, IVCA,

Tel: 087 0517754

Tel 01-260 5300

Email: kerri@simpsonftpr.ie

About IVCA
The Irish Venture Capital Association is the representative organisation for venture capital firms in Ireland. Irish VCs have invested €1.5 billion in Ireland in the last ten years and have successfully leveraged a further €1.5bn from international investors into the Irish market.