Enterprise Ireland reports Venture Funds invested £12 million in 33 projects More than 1,000 jobs created Tánaiste welcomes emergence of vibrant venture capital market

Mary Harney, Tánaiste and Minister for Enterprise, Trade and Employment today ( Thursday 21st October, 1999) underlined the importance of a vibrant venture capital market in ensuring the development and growth of Irish businesses. The Tánaiste was commenting on the publication by Enterprise Ireland of the Annual Report of the European Seed and Venture Capital Programme. This programme was established in 1996 to provide small and medium sized growth companies in Ireland with equity capital.

Since 1995 Enterprise Ireland has pursued a policy of actively engaging private sector institutions, corporate and venture capitalists with a view to forming new venture capital funds. Since 1996, IR £70 million has been committed by these new venture capital funds for investment in start up and developing companies.

“Today, we have an active venture capital market in Ireland and the establishment of successful partnerships between Enterprise Ireland and the private sector has been a key factor in bringing about this. A thriving Irish venture capital market is essential to the development of business. It is equally vital that the private sector becomes the primary source of equity for expanding companies,” said the Tánaiste

The Tánaiste continued “The availability of capital to fund new and expanding business is a key to the development of a strong indigenous industry sector in Ireland. Industry relies to a much greater extent on equity financing than it did fifteen or twenty years ago when borrowings were the primary source of funding. This is a healthy development.”

The demand for venture capital has increased and this is reflected in the investment level for 1998 which at £IR 11.85 million is almost double the 1997 figure. At the forefront of these investments is the software sector, which captured the greatest share at almost 60% of the total investments.

The Tánaiste welcomed the fact that in 1998 IR£ 3.8 million has been invested outside Dublin . “This figure represents 34% of the total invested and is over three times greater than the 1997 level. This is a clear signal that the enterprise dynamic is permeating the country as a whole and is not size or location dependent. We need to further encourage the exploitation of industry segments that can be developed and clustered in specific regions.”

Start up and early stage companies captured 76% of investments in 1998, an indication that venture capitalists are now prepared to focus on higher risk early stage investments.

Commenting on investments to date Mr Gerry Moloney, Director, Investment Services, Enterprise Ireland said “The demand for venture capital has increased reflecting the increased activity in the venture capital sector and the demands of Irish entrepreneurs for this source of funding. The fund managers report a continuing high level of enquires and formal applications being received. I anticipate a further increase in investment levels in 1999 now that all of the funds are operational.”

• 13 funds fully operational
• Investments of IR£ 11.85 million in 1998 compared to IR£6.8 million in 1997.
• 33 investments in 1998 compared to 16 in 1997
• Total employment of 1,022 in investee companies compared to 570 in 1997
• Areas of investment include software, manufacturing, communications, Multimedia, Biotechnology, Services and Food processing.
• 76% of the investments are in start up and early stage companies.
• 59% of invested funds are in software projects.