Catalyst Deal Tracker: Investment in NI tech firms reached £139m in 2022

Venture capital investment in Northern Ireland firms reached an all-time high in 2022 with the overall number of deals also surpassing previous record figures, according to new data from Catalyst.

Research for Catalyst’s annual NI Deal Tracker report has revealed that £139m was invested across 89 deals in locally based innovation and growth stage companies in 2022.

This represents a 29% rise in the value of transactions completed the previous year, when, £107m was invested across 68 deals, and is more than triple the £44.3m figure from 2019.

The release of the figures come as the venture capital market is reacting to the failure of Silicon Valley Bank, one of the biggest global lenders to venture capital-backed start-ups, a situation which created significant uncertainty in the industry before the US government guaranteed deposits and HSBC bought the bank’s UK arm.

Based in Belfast, Catalyst has been tracking innovation investment in the province since 2017, reviewing each investment to ensure the accuracy of reporting for NI. The significant jump in deal value this year reflects an increase in the number of established NI companies who have turned to venture capital investment to support their growth plans.

The average amount invested in each deal was £1.6m, an increase of £100,000 on the average funding round recorded in 2021. Catalyst’s research also noted that there were 20 deals in the £1m to £5m range, 10 investments with a value of more than £5m, and five deals worth more than £10m.

While around £40m of the money invested was from Northern Ireland sources, 71% of the total sum invested came from parties based outside of NI, demonstrating increased interest from international venture capital investors.

During the year funds such as Google Ventures, Barclays, Clean Growth Fund, ExSight Ventures, Visionary Ventures and SignalFire made investments in NI companies.

The growth in investment in NI companies has come in a challenging year nationally and globally for venture capital deals, with Beauhurst’s analysis of investment levels across the UK showing a 16% decline on the prior year.

Kieran Dalton, head of scaling at Catalyst, said: “In light of a fall in venture capital investment in the UK market overall, the increase in venture capital investment into NI companies is very welcome. 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.”

Steve Orr, chief executive of Catalyst, said: “These figures show that NI 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, startups, scaleups 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 startups 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.”

The full NI Deal Tracker report will be released next month.