VENTURE capital (VC) investment in Northern Ireland hit an all-time high in 2022, driven by inward investors, according to a new report.
Catalyst’s annual NI Deal Tracker recorded £139 million invested in 89 deals last year, a 29 per cent increase on 2021, and more than three times the £44.3m invested before the Covid-19 pandemic in 2019.
The investment in the north’s burgeoning tech cluster is all the more significant given VC investment in the UK fell by 16 per cent last year, while VC activity in general has fallen globally.
The report comes as the world of tech and VC were rocked by the collapse of Silicon Valley Bank (SVB) on Friday.
The UK arm of the California-based lender included companies on both sides of the border, who had their accounts frozen at the weekend.
HSBC’s acquisition of SVB UK and the US Government’s guarantee on deposits helped alleviate most concerns on Monday, but banking stocks remained under pressure on Tuesday as investors weighed up the potential exposure of other lenders.
Catalyst, which operates the north’s research and innovation hub in Belfast’s Titanic Quarter, has been tracking innovation investment in Northern Ireland since 2017.
Its latest report said the significant jump in deal value in 2022 reflected the increase in the number of established Northern Ireland companies who have turned to VC investment to support their growth plans.
The average deal last year was £1.6m, although 10 had a value of more than £5m, with five deals passing the £10m mark.
The bulk of the £139m invested in 2022 (71 per cent) came from parties outside Northern Ireland. Around £40m was invested internally.
Catalyst said Google Ventures, Barclays, Clean Growth Fund, ExSight Ventures, Visionary Ventures and SignalFire made investments in companies here last year.
“In light of a fall in venture capital investment in the UK market overall, the increase in venture capital investment into Northern Ireland companies is very welcome,” said Kieran Dalton, head of scaling at Catalyst.
“When we analyse the underlying data, we can see the cause of this increase has been the emergence of a cluster of growth companies which are redefining the aspirations for innovation companies within NI.
“Raising venture capital investment is always a challenge, however, as more seed companies in NI continue to ‘graduate’ into growth and venture stages, they can be confident that external investors are increasingly available to support their needs.”
Catalyst’s chief executive, Steve Orr, said: “These figures show that Northern Ireland companies continue to attract increasing amounts of international investment, even at a time when venture capital activity globally has fallen.
“The rise is testament to the quality of founders, startu-ps, scale-ups and the strong local ecosystem that now exists here.
“Given the slowdown and ongoing pressures facing the venture capital market, which have been exacerbated in recent days by the uncertainty created by the rescue of the sector’s major banking player, Silicon Valley Bank, it will become increasingly important for local start-ups that global investors are aware this is a region and an economy that has a strong track record of producing innovative companies with high growth potential.”
