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Later stage investments slow down Back  
Investment in Irish sector is down.
Later stage investments by venture capitalists in the Irish market was down by €33.7 million in the first three quarters of 2006, compared with the same period last year, according to the latest Dow Jones VentureOne/Ernst & Young Quarterly European Venture Capital Report. Second round investments fell by €12.0 million to €7.7 million, while first round investments are down slightly to €13.7 million.

‘The decline in venture capital investment in the first three quarters is focused on later stage investments… as IPOs and trade sales come back on the agenda as sources of funding for venture capital backed Irish companies,’ said Garry O’Rourke, director in Ernst & Young’s Transaction Advisory Services Department.

Overall, a total of €51.9 million in venture capital was invested in Ireland during the first three quarters of 2006, which represents a decline of €45.4 million from the amount raised in the first three quarters of 2005, and continues a trend of lower venture capital investment evidenced since the first quarter of 2006.

The number of deals also declined from 28 to17 in the same period. Information technology remains the dominant sector in Ireland accounting for €42.5 million or 82 per cent of all venture capital investment with healthcare accounting for the remaining €9.4 million. In terms of deal numbers, there were 14 deals in IT and three in healthcare during the first three quarters of 2006, as against 21 and seven in the first three quarters of 2005.

The most significant first round investment in the third quarter of ‘06 was €6.8 million raised by RedMere Technology, a provider of application-specific standard products (ASSPs) for consumer multimedia applications.
Ireland ranked thirteenth in Europe in terms of amount raised (behind Norway and ahead of Italy), and also in number of deals (behind Finland, and ahead of the Netherlands).

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