Just a quarter of venture capital investment goes to start-ups outside Leinster
(Left to right) At the Irish Venture Capital Association Munster enterprise policy lab in the Clayton Hotel, Cork City on Friday were Denise Sidhu, chairperson IVCA and Simon Coveney, Minister for Enterprise, Trade & Employment. Picture: Diane Cusack
Just 26% of venture capital investment goes to small firms and start-ups outside Leinster, an investment event in Cork heard.
The Irish Venture Capital Association (IVCA) held its Munster enterprise policy lab in the city on Friday. Addressing the event, Denise Sidhu, chairperson, IVCA and partner of Cork-headquartered Kernel Capital, pointed out that venture capital investment outside Leinster amounted to 26% of the total in 2022 or €340m. Munster accounted for 7% of the total last year or €95m.
"As Dublin faces increasing capacity issues, there is an opportunity to ensure a shift in population and jobs to each region. Recent job cutbacks across pharma and tech multinationals, and fall in corporation tax from these sources, emphasise the need to grow an indigenous regional base of innovative firms."
Dr Sally Cudmore, director of innovation at University College Cork said it has seldom been harder for Irish SMEs to raise early-stage funding but pointed to a number of growth opportunities for Irish technology firms.
Carrigaline-based Gasgon Medical has so far raised €2.25m in seed funding from Irish, US and Spanish venture capital investors. Vincent Forde, founder and CEO said SMEs located outside the Dublin financial bubble looking to raise capital have to work much harder to build relationships and trust.
Larry O'Donoghue, CEO, CorkBIC agreed with Forde that the best start-ups will tend to secure investment, regardless of location. “But it’s a chicken and egg situation. Venture capital firms need a supply of good companies in which to invest. How can we boost the pipeline of investible start-ups in the regions?”
He said that one of the major gaps that has existed for some time in the regions is the lack of fund-backed accelerators to help established start-ups scale quickly.
“Fund-backed accelerators could attract not just indigenous start-ups and invest in them at a pre-seed and seed stage, but also bring investable international start-ups to relocate to Ireland and develop their start-ups from a regional base,” said Mr O’Donoghue.
The Munster event was organised by the IVCA in response to the Government’s White Paper on Enterprise 2022-2030.
