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Irish companies raise over $500m in VC funding in H1 2018

KPMG Venture Pulse Q2 2018

KPMG has published its Venture Pulse Q2 2018 report, tracking venture capital activity around the globe.

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  • Increase in number of VC deals in Ireland to date 2018, compared with the same period in 2017 
  • Global venture capital (VC) market achieves new quarterly record
  • The Q2 2018 edition of the Venture Pulse report produced by KPMG analyses the latest global trends in venture capital investment data and provides insights from both a global and regional perspective. All figures cited are in USD; data for the report is provided by PitchBook.

Dublin, 20 August, 2018 - KPMG has published its Venture Pulse Q2 2018 report, tracking venture capital activity around the globe. The report found that, in the second quarter in Ireland, 14 companies raised $122.47 million between them, bringing total funds raise by Irish companies in H1 to $500m.

Anna Scally, Partner, Head of Technology and Media and Fintech Lead at KPMG in Ireland commented on the Irish findings: “In Ireland, VC deal volume declined between Q1 2018 and Q2 2018. However to date in 2018, the amount raised by Irish companies (Republic of Ireland only) is over $500m, made up of  $377.57 million across a number of companies plus the $125m Intercom deal. This is considerably higher than the same period last year, with an increase also in the number of deals year on year. In Q2 2018 Sublimity Therapeutics, a Dublin based oral drug delivery company raised $64m. Phorest, a SaaS company that specialises in computer software for
hairdressers, spas, and beauty salon owners raised over $23m and Neurent Medical, a Galway based medtech start-up which raised over $11 million. 

With the General Data Protection Regulation (GDPR) coming into effect in Europe within this reporting period, the report finds that while there may be negative short-term consequences, particularly for start-ups looking to manage the new compliance regime, the benefits of a strong data protection system could make European companies more attractive over the longer term as they become global leaders in how to manage private consumer and employee data.

Commenting on the impact of new GDPR regulations, Anna Scally, said: 

“While the short-term impact of GDPR has caused some diversion for European companies, requiring them to focus on data protection and retention, achieving compliance in this area could generate some significant opportunities in the future. Since GDPR is shaping up to be the gold standard for the security and retention of personal information, compliant companies should be well equipped to compete anywhere in the world.”

Global Q2 ’18 Key Highlights

  • Globally, venture capital (VC) investment hit a new record high in Q2’18, reaching US$69.8 billion* across 3,108 deals in Q2.
  • Global VC investment rose from $58 billion in Q1’18 to $69.8 billion in Q2’18, a solid increase buoyed by five $1 billion+ megadeals. 
  •  Corporate participation in global VC deals continued to rise, reaching a record 22 percent in Q2’18 of overall volume, with associated deal value hitting nearly $46 billion.
  • Global first-time venture financing volume remained subdued during Q2’18 and is on pace for its lowest annual total in a decade.     
  • Asia set a new record for VC investment in Q2’18, with $35.9 billion raised across 466 deals.  Chinese companies represented eight of the top 10 deals globally, led by a massive $14 billion deal by Ant Financial.
  • The US saw 9 deals valued at $250+ million during the quarter, led by massive deals by Faraday Future and Lyft.  California continued to dominate as the US VC market leader, accounting for nine of the top 10 deals in the US.
  • While overall investment in Europe remained strong at $5.6 billion – deal volume, in particular for angel/seed stage deals declined for the fifth straight quarter.

VC investment in Europe remains robust 

Europe continued to see strong levels of venture capital investment, with $5.6 billion in VC invested across 631 deals in Q2’18.  The top deals for the quarter included London-based fintech Revolut ($250 million) whose CEO, Nikolay Storonsky, spoke at MoneyConf in Dublin in May, Estonian transportation company Taxify ($175 million), and London-based Freeline Therapeutics ($119 million).

The number of European VC deals declined for the fifth consecutive quarter, driven in large part by the ongoing decline of angel/seed stage deals.  First-time financings remained well off last year’s pace, with only 310 such deals in the first half of 2018 versus 1,100 in all of 2017. 

Despite a slide in exit volume over the past few quarters, venture-backed exit activity in Europe remained historically healthy.  The second quarter saw over $5.7 billion in total exits, including PayPal’s $2.2 billion acquisition of iZettle and Adyen’s IPO on the Amsterdam Stock Exchange.

On a regional basis, the UK led the charge once again with over $2 billion invested, followed by France with over $800 million – its second highest quarterly total.

 Strong outlook expected for remainder of 2018

Venture capital activity globally is expected to remain strong heading into Q3’18. The impact of tax reforms in the US, a significant amount of dry powder, and the continued flow of funding into the VC world are expected to keep the VC market strong.  Autonomous driving, healthtech and biotech are expected to be big winners over the next few quarters, in addition to blockchain.  

 *Note: all figures cited are in USD, data for the report provided by PitchBook. The methodology used is outlined in detail in the report.  

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Contact

Kelli O'Malley

Communications Manager

KPMG in Ireland 

 

 

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