Funding Across Irish Fintech Sector Slows Down Amid Global Uncertainty
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The level of funding across the fintech industry in Ireland has dropped again over the last 12 months. The decline is attributed to economic and geopolitical issues that continue to affect the operations of fintechs globally.
Irish fintech funding slows down in 2022
The decline in funding was published in a report by KPMG. According to the report, nine fintech investment deals were completed during the first six months of 2023. The total amount of funding raised by this sector during the period reached $59.2 million.
During the first half of 2022, the fintech industry secured the same number of deals, but the value was notably higher at $742 million. One of the main reasons a massive investment was seen in 2020 was a $676 million investment made by JPMorgan in Global Shares, a fintech based in Cork.
The report by KMPG further addressed the effects of the high levels of inflation and interest, the geopolitical crisis in Ukraine, and the escalating tensions as some of the factors causing the decline in fintech funding.
Venture capital funding across Ireland has also dropped significantly this year. The value of deals between April and June declined by 17% compared to what was reported in 2022.
The drop in investments across Ireland also reflects the trends across the global markets. In the last six consecutive quarters, global VC funding has dropped. At the same time, global fintech funding during the first half of 2023 declined to $52 billion, notably lower than the $63 billion reported for the same period last year.
The head of financial services at KPMG, Ian Nelson, said that Ireland’s fintech market should be considered robust. The robustness of the space can also be seen across other areas such as insurtech, regtech, payments, and wealthtech. He noted that the company anticipated the funding would rebound when market conditions improve.
Irish fintechs secure funding
Despite the drop in overall fintech funding, several fintechs in Ireland have received a significant amount this year. Fineos, an insurance company based in Ireland, secured a $40 million raise to strengthen its balance sheet and access general working capital. This raise included a $35M institutional placement and a $5M conditional place from the founder and CEO of the company, Michael Kelly.
The acquisitions announced by the company have been vital to its growth. In August 2020, the company announced the acquisition of Limelight Health for $75 million. The company is responsible for creating products that will streamline and automate sales. It also supports underwriting functions to support insurers.
NomuPay is a payments startup based in Ireland, and it recently raised $53.6 million in a funding round co-led by Finch Capital and Outpost Ventures. The other investors in the funding round included angel investors. NomuPay will use the new funding to achieve scalability and invest in product development.
