Venture capital investment into Irish firms plummeted 57% between January and March, compared to the same period last year.
Irish businesses raised $172.8m during the period through 24 deals, down from the 25 worth $401m in the first three months of last year.
Rising interest rates, high inflation, worries about the banking system and the ongoing war in Ukraine, as well as wider geopolitical and domestic challenges, all contributed to the drying up of the flow of cash, KPMG’s latest Venture Pulse report found.
The problem domestically was mirrored internationally, with global VC investment falling dramatically from $177.6 billion across 9,349 deals in the first three months of last year to $57.3 billion across 6,030 deals in the same period this year.
Bucking the trend though was US based payment firm Stripe, founded by the Irish Collison brothers.
The $6.5 billion it raised was by far the largest fundraise of the period anywhere in the world.
Vivasure Medical, the Galway based medical device firm, secured the largest deal within the country during the period, raising $32 million.
“One thing that is fairly positive at the moment is that we haven’t seen a complete drop off in early-stage deals,” said Anna Scally, Partner, Head of Technology and Media in Ireland.
“Notwithstanding the inherent risks and uncertainty about the future, VCs realise they still need to invest in early-stage companies.”
“Otherwise, they risk missing out on the next wave of growth companies.”
KPMG is predicting that the current quarter will also be a challenging one for VC investment here, with investors exercising caution and assessing deals carefully.
“We anticipate investment to continue in high priority areas, including medtech, energy, cybersecurity, cleantech and ESG,” said Anna Scally.