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Venture capital investment down on 2002 Back  
The value of venture capital deals in Ireland has decreased by over 50 per cent, or by €20 million, in the third quarter of 2003, compared to Q3 2002.

Last year €41.87 million worth of deals were transacted up to Q3, compared to €20.30 million for Q3 of last year.

The statistics were revealed in a joint European venture capital survey conducted by Ernst &Young and VentureOne.

The survey also reveals that there were 32 deals financed to date in 2003 in Ireland compared with 38 deals over the same period in 2002. On a sectoral basis, communications outperformed other sectors, with five deals financed up to Q3, representing a 150 per cent increase on 2002.

However, other sectors fared worse, with software seeing the number of deals decline by 75 per cent, and the overall information technology sector seeing the number of deals financed decrease by 50 per cent, compared with the same period in 2002.

The overall European market also saw a decline in the number and value of deals being transacted, but to a lesser extent than in Ireland. €616 million was invested in 191 deals in Q3,2003, which represents a 20 per cent decline in euros and a 25 per cent decline in deals from the second quarter of the year. The UK was the one market that saw a significant improvement in its volume of deal activity, with a 52 per cent increase in total investment to €277 million, representing almost half of Q3,2003, investments in Europe.

This trend stands in contrast to the essentially consistent results in U.S. venture activity in the third quarter,2003. Enda Kelly, a partner in emerging growth markets with Ernst & Young, said that wenture capital activity in Europe historically lags behind the U.S. by at least two quarters. Therefore, he expects to see the European market following the trend set by the US in the first half of 2004.

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