A total of 24 venture capital [VC] deals were closed in Q2, the most significant of which was the $110m raised by biotech SynOx Therapeutics, the Dublin-based drug discovery company focused on developing treatments for diffuse tenosynovial giant cell tumors.
Ocean data company XOCEAN raised $32.5m in a Series B funding round, and digital health and wellbeing firm secured $18.3m in new funding while fintech Nory, which aims to use AI to makes restaurants more efficient, raised $16.1m.
The number of deals fell from 33 in Q2 last year, but the value of Irish VC deals increased from $172.5m, with investors making bigger bets on areas such as AI, biotech and fintech.
Globally, VC investment increased from $75.4bn in Q1 to $94.3bn in Q2 fuelled by nine 'mega-deals each worth more than $1bn, the second-largest total seen in a single quarter.
However, the volume of deals fell to 7,691, the lowest level globally since the third quarter of 2016, and AI accounted for over half of the ten largest funding rounds globally during Q2.
"Irish and European investors are more confident this quarter," said Anna Scally, head of technology and media at KPMG Ireland.
"However, the uncertainties created by the 2024 elections in the US and Europe, together with a sluggish IPO market and relatively high interest rates, mean they will remain cautious, and it’s unlikely to see VC investment return to the levels reached in 2021 and 2022.
"It’s particularly encouraging to see investment and interest in Irish innovative solutions in biotech, ocean data tech, healthtech, and AI."
Heading into Q3, VC investment globally and in Ireland is expected to remain relatively steady, with AI continuing to attract a large share of funding.
AI will likely remain a very hot area in addition to energy, cleantech and regtech with the advent of the EU's Digital Operational Resilience Act (DORA) regime.
In fintech, VC deals globally fell from $62.3bn across 2,287 deals in H1 2023 to $51.9bn across 2,255 in H1 2024.
The trend was reversed in Ireland though, with the $140.8m raised across 10 deals in the first six months of 2024 comparing favourably with $59.2m across nine deals during the same period last year.
The market was heavily skewed, however, by the $109m buyout of Irish-based SoftCo by Keensight Capital while software consultancy Zartis and mobile payment platform CleverCards raised $10m and $8m, respectively.
The first six months of 2024 have been challenging for the fintech market globally amid the high interest rate environment and the significant amount of global geopolitical uncertainty," said Ian Nelson, head of financial services & regulatory at KPMG Ireland.
"However, we can see that, in Ireland, there is interest in strong business cases within the wider fintech space.
"The volume of early-stage deals has been thriving both because of the interest in new technologies, such as AI applications, and newer business models to meet the changing nature of the financial services sector. We expect to see this continue, in the remainder of 2024.”
* This article was originally published on BusinessPlus.ie.
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