Irish venture capital investments plunge amid economic uncertainty

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Irish venture capital investment fell in the second quarter as tighter rates and economic uncertainty led to a drop in deals.

that’s according to KPMG’s latest Venture Pulse report which tracks global venture capital activity.

After two years of strong venture capital investment fueled by economic growth in Ireland, this type of investment fell in the second quarter of the year. Irish companies raised $207m (€203m) in venture capital in June over the period.

This marked a notable drop from the same quarter in 2021, which saw Irish businesses receive $641.5 million in such investments.

It was also down from the first quarter of the year, when venture capital investment in Ireland was $401 million.

Venture capital investment in Ireland in the second quarter was spread across 44 deals, the largest of which included Cork-based automation software developer Keevlar, which received $24 million.

Galway medical technology company Vivasure Medical was close behind, receiving a $23 million investment, while Cork-based employee engagement software company Workvivo secured a $22 million venture capital investment. million in the second quarter.

KPMG reported that 10 of those deals were between $10 million and $25 million, with none exceeding the $100 million mark.

This downward trend was also reflected around the world with declining global activity levels. Venture capital investment fell to $120 billion in the second quarter of 2022 from $165.3 billion in the first quarter.

The number of transactions also fell sharply, from 11,468 in Q1 to 8,420 in Q2.

KPMG pointed to rising geopolitical tensions and economic uncertainty as the main factors for the slowdown.

Changes in monetary policy also played a role in
the decline in the number of transactions.

“As the global economy continues to become more uncertain, we are now seeing higher levels of caution in venture capital, particularly in relation to larger deals, not just in Ireland, but around the world. “said Anna Scally, head of fintech at KPMG.

“Added to this is that during the second quarter of 22, the European Central Bank also announced that it would raise interest rates for the first time in 11 years”

Ms Scally added that investment should remain “moderate” for the rest of the year.

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