Irish companies see second highest level of VC investment in 2020

Irish companies secured the second highest level of venture capital investment on record in 2020, the latest KPMG Venture Pulse reports shows. 

KPMG said that a total of $970m was invested in 226 deals involving Irish companies, up from $561m across 242 deals in 2019. 

It noted that the investment levels for 2020 are the second highest on record and come after $1.305.2 billion was invested in Irish companies in 2018.

Today's report shows that venture capital activity in Ireland rebounded in the fourth quarter of 2020, with $422.6m invested in 27 deals involving Irish companies. This marked an increase from the $118.2m invested in the third quarter of last year.

The top five deals which closed in the last quarter of 2020 here included an investment of $190.7m in Cork-based Amarenco.

It secured backing to fund its ambitions to have more than 1GW of projects under construction in the coming months and 3GW by 2023 in Europe, APAC and the Middle East.

Immedis, a specialist provider of enterprise technology solutions for global payroll and mobility tax services to multinationals, got VC backing of $50m, while clinical stage biopharmaceutical company SynOx Therapeutics secured $43.6m.

Priothera, which develops receptor modulators intended to improve the lives of patients suffering from hematological malignancies, got $35.3m in funding, while TechMet secured $25m. The company is working on strengthening the global metal supply chain for technology metals.

KPMG said that other notable deals included a $12.3m raise by medical technology company Neuromod, $10.2m raised by e-commerce financing and marketing analytics start-up, Wayflyer and a $10m raise by Corlytics, which is involved in regulatory monitoring, obligation management and regulatory risk analytics.

On a global front, KPMG also said that the picture is positive with VC-backed companies raising $80.8 billion globally across 5,418 deals in fourth quarter of 2020. 

"Despite the backdrop of the Covid-19 pandemic, the US presidential election, Brexit negotiations and trade tensions between the US and China, last year was the second biggest year for VC funding in a decade, next to 2018, with $300.5 billion recorded, up from $281.6 billion in 2019," KMPG said.

Anna Scally, Partner and Fintech Lead at KPMG in Ireland, said that despite the global pandemic, the venture capital market in Ireland remained very robust in 2020.

"The Covid-19 pandemic has also likely accelerated investment for some companies, with technology, healthcare and medtech companies consistently featuring in the top 10 for the most investment secured. Investors also remain keen on the green agenda, evidenced by the standout deal secured by Amarenco late last year," Ms Scally said. 

But she also said that the bigger picture, however, is a real cause for concern. 

"While established companies are attracting big investments in sectors that are already coping quite well, it's clear that not enough investment is going to early stage companies, which could affect future deal activity," Ms Scally said. 

"When early stage companies don't receive funding, they will not be capable of scaling up and securing follow-on investment, which will have a significant longer-term impact," she cautioned.