Irish VC investing recovers to €255m in 2003

Dateline: 21 June 2004

The Irish Venture Capital Association (IVCA) reports that investment by Irish venture capital companies recovered in 2003 to €255 million made in 187 companies based on figures compiled by PwC. This compares to €105 million the previous year. Support for the Irish technology sector by Irish VCs remains very strong with 96% of 2003 investment being made in tech firms according to the IVCA Annual Review issued today.

“This is the highest weighting of investment in the tech sector by any European country,” commented Shay Garvey, the new chairman of the Irish Venture Capital Association and a partner in VC company, Delta Partners. The Annual Review also finds that the valuation of the aggregate investments made by Irish VCs in the past decade now stands at close to €1 billion spread across hundreds of companies.

The 2003 figures show a trend towards MBOs (Management Buyouts) with 70% of the total invested in buyouts of seven existing companies. “The buyout opportunities in Ireland have traditionally been very few. However, given the depressed share prices of many publicly quoted technology companies in early to mid 2003, VCs backed a number of management teams in the buyouts of such public companies as Alphyra, Riverdeep and Conduit,” commented Shay Garvey.

He added that the IVCA Review showed a consistent pattern of investment  in start ups. VCs invested €33 million in 106 start ups in 2003 versus €27 million in 62 start ups in 2002. VC investment in expansions/other type companies at €46 million was down on the 2002 level of €76 million. However the number of companies receiving expansion type investment remained constant, 87 in 2002 and 84 in 2003.

The amount raised in 2003 by Irish VCs was €60 million. While this was substantially less than the €201 million raised in 2002, the amount raised from Irish sources actually increased from €17 million in 2002 to the total €60 million raised in 2003. This capital was raised from a variety of banks, pension funds, Government agencies individuals and corporate investors. “This reflects continuous strong support for venture capital from Irish funders in the context of a very difficult international fundraising environment,” commented Mr Garvey.

Divestments/exits realised by the industry in 2003 were €58 million from 39 companies of which €15 million was write offs, a similar proportion to previous years. 

The IVCA Chairman said that Irish VCs currently have approximately €200 to €250 million in capital to invest. “The rate of investment in 2004 is already exceeding that of 2003. The challenge for Irish VCs going forward is to seek out attractive investment opportunities while also achieving profitable exits from their existing investment portfolios.”

PwC are due to report on US and European venture capital statistics compared to Ireland in the near future.

The IVCA (www.ivca.ie) is the representative body of the venture capital industry in the Republic of Ireland and Northern Ireland.

Ends
Press queries to:
Shay Garvey (Chairman, IVCA) Tel: 01- 294 0870
Ronnie Simpson/Caroline Kohn (Simpson Financial & Technology PR)
Tel: 01 260 5300