Notable rounds this past quarter include Neurent Medical, Aerska, Evervault, Circuit and XFuel.
VC funding into Irish SMEs fell 58pc to €221.7m in first quarter of this year, finds Irish Venture Capital Association’s (IVCA) quarterly Venture Pulse survey.
The drop in funding, however, is in comparison to a record-setting Q1 2025, when Irish firms raised €532.8m. The report was published in association with William Fry.
Life sciences SMEs led funding rounds this quarter, accounting for 54pc of the total investment – or €119.5m, followed by fintech at 13pc (€28m), software at 12pc (€26.9m), cybersecurity at 9pc and environmental tech at 8pc.
The true impact of funding into AI companies, meanwhile, is difficult to estimate, noted IVCA, which classifies companies by their core industry, even if AI is embedded in their products and services.
According to the report, AI represents just 2pc of the total funding raised in Ireland this quarter. Meanwhile, globally, AI accounted for around 80pc of the record $300bn invested in start-ups in Q1 2026.
Notable rounds include Galway medtech Neurent Medical, which raised €62.5m and biotech Aerska, which raised $39m in February. Evervault, New York and Dublin-based data encryption start-up raised $25m, while fintech Circut raised €20m and enviro-tech XFuel raised €18.5m.
IVCA’s report found that funding declined across all deal-sizes except for investments less than €1m. Though this range already suffered a 42pc decline in the same quarter last year.
Meanwhile funding in the €3m to €5m range fell 77pc to €7.9m from €35m a year earlier, and deals worth €5m and €10m dropped 62pc to €16.5m from €43.8m.
85pc of the total capital raised during this quarter came from international investors. “This is glass half full territory,” noted Caroline Gaynor, IVCA’s chairperson, “as it once again highlights our exposure to overseas investment, but also emphasises the appetite for quality Irish tech firms, despite unprecedented spending on AI in the US.”
Given Ireland’s high exposure to international investments, geopolitical tensions, including the ongoing Iran war, could impact investor confidence, IVCA said, adding that it is hard to predict its impact on SME funding in the next quarter.
“Ireland is a small market subject to global geopolitical headwinds. But local policy initiatives may mitigate against this to the benefit of early stage Irish start-ups looking to raise funding this year.
“For example, Enterprise Ireland has raised its direct investment limit from €250,000, and we should see the benefits of the Government’s €250m Seed and Venture Capital Scheme 2025-2029 start to feed through this year.”
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