Investment by venture capital funds into tech firms based in Ireland increased by a fifth in the first six months of this year.
But the new figures from the Irish Venture Capital Association (IVCA) show the bulk of this increase came during a very strong first three months of the years, when there was €379.7m invested.
In the second quarter, the amount invested rose by just 2% to reach €398.4m, marking a significant slowdown in the pace of increase.
Of particular concern was a 50% drop in investment from overseas firms to €152m in the second quarter.
"It was a strong first half overall for Irish tech companies raising funds, especially when one considers the geopolitical and economic headwinds and downturn in publicly quoted technology stocks over this time," said Leo Hamill, chairperson, of the IVCA.
"It remains to be seen whether the significant slowdown in growth in the second quarter to under 2% heralds a more difficult second half to the year."
But Mr Hamill said the apparent over reliance on foreign investment threatens Ireland's ability to continue to develop indigenous world class technology companies.
"The tide of available global capital is starting to go out," he said.
The overall growth for the half year was due to an increase in deals in the €10-30m range which grew by 50% to €257.5m and in the over €30m range which increased by 36% to €371.7m.
However, the VenturePulse data, compiled in association with William Fry, shows that deals under €1m fell by 19% in the first half to €21.1m.
Transactions in the €1-5m category dropped by 9% to €83.6m.
While investments worth between €5-10m plummeted by 43% to €44m.
Seed funding dropped 7% to €47.1m in the first half, from €50.5m in the same period last year.
There was, however, a recovery in the second quarter albeit from a low base.
"We are optimistic, however, that this upturn in important seed funding will continue as the Government’s €90 million fund for Irish start-ups comes on stream in the second half," said Sarah-Jane Larkin, director general, Irish Venture Capital Association.
"If the larger deals fail to come through in the second half, then we could start to see a downturn overall."
"But while large deals are important, it’s vital that early stage firms and those looking to raise under €5m can source funding."