For Oral Answer on : 22/02/2022
Question Number(s): 61 Question Reference(s): 9702/22
Asked by: David Stanton T.D.
To ask the Minister for Finance if he will report on the recently launched innovation seed fund programme; the types of companies and initiatives eligible for support under the scheme; and if he will make a statement on the matter.
The Irish Innovation Seed Fund Programme (IISF) is designed to provide seed venture capital to innovative Irish companies and is an important step in developing the Irish venture capital market. While the overall venture capital sector in Ireland is strong and continues to grow, there is a trend towards growth being driven by larger, later stage deals and investments. The Irish market is producing ambitious founders with strong technical expertise and a drive to innovate in much greater numbers, so the need to nurture seed and scaling activities in Ireland remains very important.
The €90m fund programme is made up of a €30m investment from the Department of Enterprise Trade and Employment (DETE), through Enterprise Ireland (EI), which is matched by a €30m investment from the European Investment Fund (EIF). The €60m fund will be managed by EIF and the Irish Strategic Investment Fund (ISIF) will co-invest a further €30m alongside on a deal by deal basis. Establishment of the fund programme enhances the growing relationship between Enterprise Ireland, the EIF and ISIF. The €90m fund programme will attract both new fund managers and new private investors and will crowd-in significant private investment.
The fund programme will operate as a “fund of funds”, essentially a fund that invests in specialist fund managers, who then source companies with strong potential for a commercial return on investment. Ireland is lacking in this type of fund, so an additional benefit of this project is that the Irish equity investment ecosystem is further developed and matured.
All investments are expected to be made within a three-year timeframe. The investments are forecast to have a 10-year life. Investments will be targeted and prioritised in areas that have experienced difficulty in attracting investment, such as funds that invest in companies with a focus on regional development, climate change and female entrepreneurship.
There is no doubt that our most innovative, early stage firms have been affected by the more cautious investment environment which followed the uncertainty of a pandemic. SMEs make up over 99% of our firms and employ over one million people across our cities, towns and villages. They are the lifeblood of our economy and we will continue to depend on their innovations and successes to secure the future, sustained economic growth of our country.