Irish start-ups are enduring a period where funding has dried up, making scaling and exits next to impossible. We ask the experts and those with skin in the game what is happening
Technology Big Read: Why mega deals like Cubic are becoming a pipe dream for Irish start-ups But at an event held in Dublin last week, Barry Napier, chief executive of Cubic Telecom, which recently sold a majority stake in the business to Japanese conglomerate SoftBank for a €473 million deal, got emotional.
Napier stressed at the Scale Ireland and Arthur Cox event that for Cubic the ability to scale quickly with SoftBank’s guidance and considerable heft were the motivating factors for doing the deal.Analysis: Station F… off? Will plans for a national tech incubator work in Ireland? It’s a similar tale for employees at Global Shares, the Clonakilty-headquartered company that was acquired in a €676 million deal by banking giant JP Morgan in March 2022. Tales abound of employees paying off mortgages and buying new cars while estate agents in “Clon” have never seen such demand from locals for property.
This trend accelerated in the fourth quarter, with investment in this range more than halving – down to €31.8 million from €64.6 million – compared to the same period in 2022. In the €10 million to €30 million category, funding fell by 47 per cent to €208 million in 2023 from €396 million the previous year.
As Napier himself said at last week’s event, companies find themselves in a very different environment to that which Cubic emerged in. It’s considerably more difficult to raise currently than it was when the market was frothier, even at pre-seed and seed levels. It isn’t impossible though. “The fundraising environment in 2023 was challenging. Angel investors seemed to have a much more risk-averse attitude to start-ups, while many VCs appeared to be adopting a 'wait and see' approach and keeping their powder dry,” she said
“I used to think that if the idea was good enough, it would be easily funded – but my experience over the past few years has shown me that there are so many variables,” she said. Chris Burge, chief executive and co-founder of Spark Crowdfunding, said there has been a noticeable increase in medtech and pharma start-ups in particular using its platform to raise capital from private investors. He would like to see steps taken to open up investment opportunities further.
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