Latest phase of Seed and venture Capital Scheme marks a 42% increase in funding to underpin Irish innovation.
A new cycle of the Seed and Venture Capital Scheme has been revealed by the Irish Government.
The €250m Scheme will operate from 2025 to 2029 and will have a record allocation of €250m.
“We need to continue to develop an environment that gives more funding options to our entrepreneurs and supports their ambition so that their innovative ideas and the jobs created by them can remain here in Ireland”
The Seed and Venture Capital Scheme will be administered by Enterprise Ireland.
It is envisaged to provide vital funding for Irish companies in their early stages of development and will be an important step in developing and growing Irish equity funding.
In the first quarter of 2024, international funding into Irish SMEs fell by 57% to €184m from €425m last year.
Can Ireland create larger venture capital funds?
“Today’s announcement of a new Seed and Venture Capital Scheme, totalling €250m over five years, is good news for our entrepreneurial base seeking alternative sources of finance for their companies,” Enterprise Minister Peter Burke, TD, said.
“These vibrant and innovative companies are driving exciting change in key sectors of our economy and play a key role in ensuring that Ireland continues to enjoy a strong economy that delivers jobs and prosperity.
“I was delighted to not only approve another cycle for the Scheme but to also secure a 42% increase in funding over the existing Scheme and this will enable Enterprise Ireland to create larger funds that will be invested in Irish firms in key areas such as green tech, AI and lifesciences and others.
“We need to continue to develop an environment that gives more funding options to our entrepreneurs and supports their ambition so that their innovative ideas and the jobs created by them can remain here in Ireland.
“Over the last 30 years, this Scheme has helped Enterprise Ireland become the largest venture capital investor in Europe and given the current uncertainty with global bond markets, today’s announcement provides assurance to investors that Ireland and our companies are an attractive location for investment.
“It is a key ambition of my Department, as set out in the White Paper on Enterprise, to support our SMEs now and as they innovate for future growth. This extensive funding underlines that commitment and shows the government’s willingness to back innovation and ensure that our companies can continue to grow and thrive.”
A report by SQW Limited indicates that to date Enterprise Ireland has invested over €700m in the Scheme, which has leveraged funds totalling €3.3bn. This has proven pivotal in creating 4,300 additional jobs or 28 jobs per firm backed by the Seed and Venture Capital Scheme.
Leo McAdams, divisional manager, Investment Services, at Enterprise Ireland said that the overall vision of the Scheme is to create a more robust, commercially viable and self-sustaining sector.
“Access to finance through the Enterprise Ireland administered Seed and Venture Capital Scheme has played an important role in developing the talented pipeline of innovative, high-growth Irish-owned companies that we have seen in recent years,” McAdams said.
“Over €1.4bn has been invested in over 600 Irish owned companies by funds supported by Enterprise Ireland since the Seed and Venture Capital programme first commenced 30 years ago.
“The Seed and Venture Capital Scheme continues to strengthen the funding ecosystem for high growth start-up companies in Ireland, helping to foster an environment where companies can start, grow, innovate and scale internationally by providing vital equity capacity. This will also play a role in stimulating the Irish economy, by delivering enhanced equity capital availability for early stage, innovative Irish SMEs, supporting them to create new jobs, increase exports and to scale with a focus on ESG, sustainability and regional activity.”
Closing the funding gap
Lobby group for entrepreneurs Scale Ireland welcomed the €75m increase for Enterprise Ireland’s Seed and Venture Capital Scheme
“Today’s announcement is important if we are to meet the ambitious targets outlined in the Government’s White Paper on Enterprise to support and increase the number of indigenous companies exporting globally. We also believe this is an opportunity to address the €3m to €10m funding gap by supporting the creation of larger funds.
The chair of Scale Ireland Chair, Brian Caulfield added: “The increased Government funding will ensure that Enterprise Ireland’s Seed and Venture Capital Scheme will continue to play a critical role in supporting start-up and scaling companies. We also welcome today’s announcement given the importance of Enterprise Ireland as an investor in the absence of any significant pension fund participation. So the Government’s commitment to increased funding for the Seed and Venture Capital Scheme will make it easier for funds to raise the necessary matching capital.”
Main image at top: Daniel Izquierdo Hijazi, CEO & co-founder of Micron Agritech; Sonia Neary, co-founder and CEO of Wellola; and Leo McAdams, Divisional Manager, Investment Services, Enterprise Ireland; and Minister Burke
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