Ireland's climate tech scene 'challenging' despite VC funding record

Irish startups scored a nine percent increase in funding in 2024 compared to the previous year, leaping to a record €1.48bn, according to a report released by the Irish Venture Capital Association (IVCA) this week. The association also reported a record fourth quarter in 2024 of €535m, 162% up on the same period the previous year.

But in an interview with Impact Loop, Sarah-Jane Larkin, the association's director general, says that despite the "positive" figures, there are several challenges facing the country's VC sector.

One issue is that recent funding has concentrated on a handful of growing companies, rather than smaller firms seeking initial funding.

"The overall headline is strong…more money is better than less money," explains Larkin. "But I think one of the things we would say is if you look at the figures, a lot of the money is very large rounds into a few companies."

Four of the top five funding deals in quarter four of 2024 went to expanding Dublin-based firms: medical device company, Fire1 (€116m); travel software firm, Nuitée (€46m); AI company, Nuritas (€42m) and fintech business, NomuPay (€35.9m).

XOCEAN, a sea drone impact company based in Louth, close to the Northern Ireland border, secured €115m in funding. Their uncrewed surface vessels provide ocean data collection services that support offshore wind development, ocean mapping, and environmental monitoring.

There is a huge opportunity in climate tech, and that is not being fully realised

Larkin says she is disappointed that impact companies in general did not score more funding. Often labelled "envirotech" in Ireland, impact firms accounted for just 11% (€161.7m) of the €1.48bn total raised in 2024. Life sciences was the biggest sector (37%) followed by software (13%).

"There is a huge opportunity in climate tech, and that is not being fully realised based on our current data," says Larkin.

She hopes that more private investors and VC firms will choose to double down on impact investments in 2025, especially given that Ireland is at risk of experiencing hazards exacerbated by climate change, including coastal flooding and an increase in the intensity of wind storms.

"It would be helpful, given that we are an island at the very edge of Europe that is already battered by bad weather."

However she noted that the Ireland Strategic Investment Fund (ISIF), Ireland's sovereign development fund, is committed to investing more than €1 billion in climate between 2021 to 2026. The fund, which manages €14.3bn of state assets as part of Ireland's treasury agency NTMA, is on track to achieve this climate target ahead of time.

"We have a number of climate tech and impact funds that have received funding over the last year or so," says Larkin. "So we have – hopefully – some moves in the right direction."