Q2 is worst since 2015 for venture capital funding in Ireland

After a record high in venture capital funding in quarter one, the Irish Venture Capital Association VenturePulse survey today confirms Q2 saw a record low at just €112.6m.

Venture capital funding for start-ups and SMEs fell to €112.6m in quarter two of 2025, from €494m in the same quarter last year, according to the Irish Venture Capital Association (IVCA) VenturePulse survey published today (7 September). It is the lowest figure the IVCA has recorded since Q2 2015.

The data does refer to just one quarter, but in its report published today IVCA identifies the Q2 figures as a “warning sign” for Ireland. The figure means that despite a very strong first quarter, funding for the first half of 2025 fell by 14pc overall, down to €645.5m from €752.7m the previous year.

The IVCA had warned in Q1 that the effects of the US tariffs, for example, were not yet reflected and that future quarters could be more challenging, as 82pc of total funding in Q1 was from foreign investors.

According to the IVCA, the big funding winners in the first half of the year were the life sciences sector with €255.3m or 40pc of all funding, followed by cybersecurity at 18pc, fintech at 14pc, software at 9pc, and AI and machine learning at 8pc.

“The fall off would have been worse if not for a record first quarter 2025 which saw an increase of over 100pc to €532.8m compared to the same period last year,” said Caroline Gaynor, IVCA chair and partner at Lightstone Ventures, who added that the Q2 result was largely explained by an 81pc pull back by international investors, which invested just €69.5m in the quarter, compared to €375.3m the previous year, down by €305m.

“This is a timely warning sign for Ireland and highlights the need for us to stand on our own feet in terms of funding and backing for our brightest and best indigenous start-ups, instead of depending on volatile international support,” she said.

Director general of the IVCA, Sarah-Jane Larkin, said “bearish international sentiment” was reflected in Q2 deal sizes, with only one deal – Nomupay – in the €30m plus category, compared to five in the same period last year, and only one in the €10m plus category – Kota – down from six rounds in Q2 2024. She said there was a falloff in all deal sizes, with the exception of those under €1m. Seed funding, or first rounds by SMEs, fell by over 50pc to €25.5m, she said.

“The IVCA applauds the recent DETE report which found that ‘there is a need for future government intervention to improve the supply of scaling finance’. This new data emphasises the urgency of the situation,” said Larkin, referring to the ‘Market Demand for and Supply of Scaling Finance’ report, published in July.

Larkin echoed Gaynor’s warnings that an increasingly isolationist global economic market means Ireland must not be dependent on international markets to support indigenous companies.

Don’t miss out on the knowledge you need to succeed. Sign up for the Daily Brief, Silicon Republic’s digest of need-to-know sci-tech news.SME