2026-01-13

116. Deputy Naoise Ó Muirí asked the Minister for Enterprise, Tourism and Employment if he will provide an update on the uptake of the seed and venture capital scheme; when commitments will be made by Enterprise Ireland; and if he will make a statement on the matter. [1715/26]

My question relates to the future of a very important scheme that supports indigenous businesses around the country, namely, the seed and venture capital scheme. Will the Minister for Enterprise, Tourism and Employment provide an update on the uptake of the scheme, when commitments will be made by Enterprise Ireland, and will he make a statement on the matter?

As set out in our Department's sectoral capital plan, I and my colleague, the Minister, Deputy Burke, published last week, ensuring a vibrant seed and venture capital market that supports high growth and market disruptive businesses at all stages of development from seed to follow-on is a key priority for this Government. The seed and venture capital scheme was established in 1994 and since then has invested €700 million to support and sustain national and regional innovation which, in turn, has leveraged €3.3 billion in private investment. The scheme's key purpose is to increase the supply of risk capital to Irish SME start-ups and scale-ups, to support their growth, leverage private sector investment and establish a robust, commercially viable and sustainable venture capital sector in Ireland. By providing access to finance at the critical start-up phase, the scheme has also played a very important role in developing the pipeline of talent, innovation and high-growth Irish-owned companies. It is funded through our Department and administered by Enterprise Ireland. The scheme operates by making commitments to selected venture capital funds which, in turn, make investments into high potential, innovative companies, according to their investment strategies. The funds are selected to align with national objectives and Enterprise Ireland's strategy. The fund managers participating in the scheme look for the best of Irish innovation, namely, companies that can compete on the global stage and which typically require significant equity investment to develop their products and services. The scheme operates in five-year cycles. The Minister, Deputy Burke, launched the latest cycle of the scheme in August 2024 which will run for the period 2025 to 2029. The Government agreed to an increase of €75 million on the previous cycle. That brings the total available to invest under the 2025 scheme to a record allocation of €250 million. The first open call for the current scheme closed in February 2025 and received a record number of applications, demonstrating that there is a high level of demand for finance to invest in Irish start-ups. Enterprise Ireland made its first commitments to the fund in quarter 4 of 2025. This will be followed by a period of further fundraising by the funds.

I thank the Minister of State. I welcome the commitment of €250 million. In effect, it is venture capital provided by the State. From dealing with private venture capital funds, I know they extract their pound's worth. They look for an annual return of anything from 30% to 35% and try to get out of the business after two or three years, which does not provide the sort of space, investment and continuity required for fledgling businesses to succeed, as well as what they need in terms of building up markets, products, etc. Typically, the jobs are pretty high value. In fairness to Enterprise Ireland, it has a good track record in identifying and nurturing those companies and putting the right agreements in place to be able to invest in them. It also gives those companies the space to make their own mistakes and develop and learn as they go.

I thank the Deputy for his question and interest in this area. We know how important it is. Recently, the Minister, Deputy Burke, launched the start-up Ireland programme, along with the seed and venture capital scheme. These two pillars are critical to the strategy to make Ireland one of the best places in Europe to start and scale a business. We have allocated over €28 million to start-up Ireland in 2026 to strengthen the start-up ecosystem. The seed and venture capital scheme has gone from strength to strength. The most recent review shows that we are making huge headway with regard to the number of additional jobs that have been created - over 4,300 since it was established in 1994. The review of the scheme from 2013 to 2022 provided up to €2.5 billion in gross value added. There are significant gains in research and development and valuations. Many Irish companies have scaled onto the international and global markets as a result.

Regarding a sectoral approach to those investments, does the Department make those decisions or is it left to Enterprise Ireland to decide how to allocate the funding? Who has that expertise, because an element of expertise is required? Reference was made earlier to the geographical distribution of investment. I know it is difficult because we are reliant on small businesses looking for these funds. Can anything be done to make sure that there is some level of geographical distribution of that investment? I do not know the correct way to do that, but it would be interesting to know whether anything can be done in that regard.

I thank the Deputy for his question. Enterprise Ireland manages the fund. The fund reflects geography and Enterprise Ireland has a target of up to 60%. Funding is very much targeted at manufacturing, internationally traded services and high-growth potential areas in life sciences, healthcare, pharma, fintech, technology, digitalisation and the green and environmental sectors and is very much focused on areas which can ensure quality and inclusivity. In 2024, 22% of all seed venture capital supported companies were women-led. Enterprise Ireland is very much to the fore in that regard. We want to ensure that funding does not go solely to tech companies in Dublin. Our ambition is that many founders will come from many different backgrounds right across the country.