Investment in the Irish venture capital market increased by 35 per cent in the first quarter of 2005, up from €31.23 million in Q1 2004, to €42.11 million, according to the latest Ernst & Young /Venture One Release Quarterly European Venture Capital Report. The €42.11 million invested in the first quarter of 2005 is also an increase of 97 per cent from the last quarter of 2004, when the amount invested was €21.37 million.
Information technology deals continues to drive this growth, with seven of the eight deals completed in Q1, and 85 per cent of the total funds invested in this sector. The largest investment in Ireland was in Corvil Networks, a provider of a technology for measuring and controlling the bandwidth requirements of IP traffic flows. The company raised €15 million in a later stage round.
Although the volume of investment was up in Q1, the number of deals was down from the ten deals transacted in Q1 and Q4 2004.
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In terms of number of deals, Ireland remains the seventh most active nation in Europe, but in terms of amount of funds raised, Ireland has slipped down to 8th place, mainly due to increased venture capital activity in Denmark. In Europe, venture capital investment increased by 19 per cent to €880.3 million. Whilst the European investment figures are up on this period last year the deal flow in Europe has dropped to less than 200 deals, a 27 per cent decline.
Garry O’Rourke, a senior manager with Ernst & Young Corporate Services said, 'These figures show that venture capitalists are directing their investments into those companies which seem to have the brightest future potential and in Ireland, specifically the IT sector. Across Europe, the fact that first-round deals are getting larger shows that VCs are optimistic about the growth potential of the current wave of new start-ups in Europe’. |
