Revving up the Emerald Isle’s VC engine: VCJ

When Enterprise Ireland, a government business development agency, was formed in 1998, the Irish VC scene was, to put it mildly, barren.

But with the Dublin-based agency serving as an accelerator for early-stage companies, Ireland has become a fertile terrain of VC activity.

“Our job is to encourage the establishment of sustainable growth, export-focused companies,” said Eamonn May, manager of Enterprise Ireland’s growth capital and banking relationships. “We operate nationally—not just in pockets. We work with companies from startups to right before they become IPOs—if they’re going down that road.”

Whether it’s serving as an LP for local VC funds or providing financing to early-stage firms or startups, Enterprise Ireland has become a “cornerstone investor” in many Irish VC deals.

“In order to have an active tech center, you need to have a few VCs,” May said.

Mark Horgan, a partner at the Dublin-based, 10-year-old venture firm Atlantic Bridge Ventures, agreed. He echoed the opinion that what gives the Irish venture scene its edge is not only the hefty government support it receives from agencies like Enterprise Ireland, but also the in-depth knowledge that VCs bring to their respective investments. Dilettantes they are not.

“They tend to get involved in areas they know best,” said Horgan, who is also the current chairman of the Irish Venture Capital Association (IVCA), a membership organization comprised of Irish venture firms.

“Again, that’s good for the tech sector and us VCs because that means the companies coming through are high quality. Some of them had been operating in stealth mode for a year or two. They’ve built platforms and are ready to go to market.”

Yet there are some indications that local VC activity might be slowing down. According to data from the IVCA, total seed funds raised in the country for 2013 was about 52 million euros ($71.5 million), a slight decrease from the roughly 54 million euros raised for seed/early-stage funds the previous year.

However, other statistics suggest otherwise. For example, IVCA reported that Irish companies raised about 285 million euros from VCs in 2013, a 6% increase from the 269 million euros raised in 2012. Most of the funding was raised by companies in the software, medical devices, pharma and biotech sectors.

One example of a sizable Irish VC deal in 2013 was 10-year-old Dublin drug development company Opsona Therapeutics, which grabbed 36 million euros in Series C financing from a number of investors, including Novartis Venture Fund, Fountain Healthcare Partners, Sunstone Capital and Amgen Ventures.

This story first appeared in Reuters Venture Capital Journal. Subscribers can read the original story here. To subscribe to VCJ, please email [email protected]

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