A combination of geopolitical uncertainties, high interest rates and inflation and ongoing concerns about valuations contributed to a challenging year for the venture capital market in 2023, according to KPMG in its latest Venture Pulse.
Total investment in Ireland in 2023 declined to just over $764 million across 101 deals, the report shows.
That represented a decrease of over a third from the $1.16 billion invested across 122 deals in 2022.
The performance was mirrored around the world with global VC investment falling by just over a third in value terms from $531.4 billion across 51,894 deals in 2022 to $344 billion across 37,808 deals in 2023.
The values are presented in US dollars for consistency and to allow for global comparisons.
The final quarter of the year was described as 'particularly soft' with global investment falling to $74.9 billion - which was the lowest level since the second three months of 2019.
Investment levels in Ireland in the quarter also fell to levels not seen in five years as investors remained cautious about their deal-making activities.
Among the companies here that attracted funding was Shorla Oncology, an Irish-founded healthcare start-up that develops pharmaceutical therapies to help cancer patients.
It raised $35 million in Series B funding. EasyGo, Ireland's largest private car charging network provider, raised $32 million, and LUMA Vision, a developer of a novel four-dimensional (4D) cardiac imaging and navigation platform raised $22M in Series A3 funding.
"Despite the significant challenges faced across the globe, VC investment in Ireland was reasonable in 2023," Anna Scally, Partner, Head of Technology and Media at KPMG in Ireland said.
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"Investors are still willing to back innovative companies with market-leading technology and market opportunity. Investors are also willing to invest in key sectors, including AI, cleantech and life sciences," she added.
Investment levels are expected to remain muted in the early part of 2024 with continued uncertainty arising from war in Europe and the Middle East as well as uncertainties arising from expected elections.
An increased focus on profitability and the surge of investment into the area of Artificial Intelligence are among the key trends in the industry in 2024, according to the report.
