New figures show that Irish companies raised a total of €288m last year, an increase of 18.6% on the previous year.

The Irish Venture Capital Association says the increase came against a backdrop of a severe credit crunch and global banking crisis.

The IVCA's chairman John Tracey said the increase in Ireland compared to significant falls in activity levels of up to 70% in the US and UK markets.

Last year's funds of €288m compared to €242.9m in 2008 and €225.9m in 2007, the IVCA noted. The number of firms that raised funds last year rose to 139 from 93 in 2008 and 82 in 2007.

The IVCA's general director Regina Breheny said that first round funding represented 25% of funds raised. But she said she was concerned that Government spending cuts at agencies like Enterprise Ireland could badly affect the emergence of future innovative companies.

'It would be a false economy as research shows that these companies grow faster, hire more graduates and export more than other indigenous firms,' she added.