Irish fintech investments dropped by 90% in the first half of 2024

A new report published by Finch Capital shows a drastic decrease of Irish fintech spending in the first half of 2024. The report explains that the most likely reason for the decline is cautious investor sentiment that dominated the year.

Ireland Saw A Major Drop In Fintech Investments In H1 2024

According to the report, the total investments went down by 90% on a year-over-year basis during the first six months of 2024. As a result, H1 saw a decrease from 212 million EUR in H1 2023 to 22 million EUR in H1 2024.

The report noted that venture and buyout capital in Ireland remained mostly the same in 2024 as they were in the previous year, although there was a massive 40% reduction in the average fund size.

Commenting on the H1 figures further, Finch Capital said that the largest deal done during this period was a €10 million funding round for a Cork-based software consulting company called Zartis.

However, it is also worth noting that the report excluded the acquisition of SoftCo, a Dublin-based company purchased earlier this year by a private equity firm called Keensight Capital. While the exact details of the acquisition were not released to the public, estimates put the cost of the deal at around €100 million.

Irish Fintech Decline Reflects A Wider European Sentiment

Finch Capital’s report came out about a year after the Irish lobby group Financial Services Ireland requested additional state support for the nation’s fintech sector. They also wanted a national fintech center to be established in order to help this branch of the financial industry in Ireland.

Commenting further on the results of their research and the discoveries that were made, the company noted that the drop in Irish fundraising is a reflection of broader market trends across the entire Europe. It stressed that there were strong economic headwinds, and that investors adopted a more cautious approach to investing.

While the report mostly focused on the poor performance of H1, it also touched upon the data involving individual quarters. The data shows that the total capital invested in European fintechs went down from €3.8 billion to €2.9 billion. 

The experts believe that the confidence in the market will return, and if this happens, funding levels and deal volumes could and should start recovering. Finch Capital noted that 2023 brought significant challenges to the fintech sector. The firm’s partner, Mike Brennan, stated that they were necessary for the sector to mature and become more sustainable.

He also said that the funding may be down overall, and that unicorn chasing has slowed, but that there is still plenty of opportunity for the firms that are capital-efficient and have a clear path to profit.

Looking toward the future, Brennan said that the AI is transforming the industry, and that the next 12-18 months will bring forth a major tuning point for European fintech sector.