A total of €494 million in venture capital funding was invested into Irish SMEs in the second quarter of 2024, up by seven per cent on the same period last year, according to the survey.

However, with the exception of seed funding, the data reports a gap in deals under €10m. Overall funding for the half year fell by almost a quarter (22 per cent) to €752.7m.

Gerry Maguire, chairperson of the Irish Venture Capital Association, said: “Deals in the €5-10m range fell by 44 per cent to €27m in the second quarter, compared to the same time last year. This worrying trend continued right across all deal sizes from €1-€5m.

“It suggests that companies are doing well raising early stage seed funding but are struggling to kick on in the next vital growth phase.”

While the number and value of deals in the €10m plus range had performed well in the second quarter, Mr Maguire said over 90 per cent of this funding came from international investors.

He said; “This is a testament to the quality and ambition of Irish companies, but points to the importance of having Irish funds of scale that can co-invest or lead these rounds. This really highlights the need to increase the availability of growth finance from local sources.”

Sarah-Jane Larkin, director-general of the IVCA, credited long-standing government policies supporting early stage funding for the continued recovery in seed funding.

Seed funding, or first rounds raised by SMEs, in quarter two rose by 18 per cent to €53.2m, compared to the same period last year. Seed funding for the half year rose by 79 per cent to €93.6m.

Ms Larkin said: “While seed funding remains robust, the IVCA is looking forward to the report of the implementation committee set up by Peter Burke TD, minister for enterprise, trade and employment, on measures to assist these exciting, high potential start-ups take their next steps through greater access to scaling finance.”

The life sciences sector with €297m (39 per cent) led the way in funding for the half year followed by envirotech (13 per cent); regtech (12 per cent); fintech and software (both nine per cent).

The top five deals in quarter two worth over €30m were regulatory compliance company, Corlytics (undisclosed amount); life sciences firm, SynOx Therapeutics (€70.3m); fintech company, AccountsIQ (€60m); cybersecurity specialist, Tines (€50m) and marine technology firm, XOCEAN (€30m).