Irish technology still attracts funding

Irish technology companies have remained popular with venture capitalists this year despite the current downturn in IT spending and market disdain for technology stocks.

According to Irish private equity firm Ion Equity, technology companies in the region have in 2001 secured between E400 and E450m from venture capitalists. Around E300m was from international VCs and the remainder from Irish groups.

The group said this figure is very close to that of 2000, exceeding estimates made earlier in the year by a number of research firms that investments for the year would drop by a third. “And I believe this trend will continue into next year,” said Neil O’Leary, managing director at Ion Equity.

“There certainly won’t be a lack of money that will cause problems for the region. If anything, a declining global economy would make things difficult,” he said.

O’Leary noted that Irish technology companies were attracting leading international venture capital names for the first time. An example is Benchmark Capital, which in November made its biggest European investment to date with a $20m second round commitment to Irish software house Openet Telecom.

Competition from abroad might put pressure on the local players. “Interest and the amount of money available has never been stronger, but placing investments might prove challenging to local firms because of the cash injections available from these larger players,” O’Leary said.

The hub for technology companies today remains the Greater Dublin area, but increasingly new companies were emerging in the North as well as near the main universities such as Galway, Limerick and Cork, said O’Leary.