VC investment rises significantly in Q1 on back of megadeals
It's a substantial increase compared to the same period last year, when $34 million was invested across 17 deals.
There was a strong start to 2025 with three deals raising over $100 million each in the first quarter. The largest deal of the quarter amounted to $125 million and was secured by the AI-powered productivity software company Tines, achieving a valuation in excess of $1 billion.
Gavin Sheehan, Partner, Deal Advisory at KPMG in Ireland, said Irish VC fundraising was very strong in Q1, 2025 led by significant fundraising by Tines, XOcean and Fire1.
"Globally, a lower deal count quarter-on-quarter is reflective of a more cautious sentiment given broader geopolitical uncertainty since the turn of the year," he said. "Notwithstanding these challenges, VC investment in Ireland mirrored international trends in terms of increased deal sizes and later stage investment with robust interest in the AI, big data and medtech sectors."
Global VC investment surged from $118.7 billion in Q4, 2024 to an eleven-quarter high of $126.3 billion in Q1 this year, despite ongoing geopolitical conflicts and tensions, continued concerns about global trade and tariffs, and the delay of a major reopening in the IPO market.
The overall increase in deal value was largely driven by a series of mega-rounds by AI companies, including a record-setting $40 billion raise by OpenAI.
Meanwhile, VC investment in Europe held steady in Q1 at $18 billion, although deal volume declined from 2,314 to 1,883 quarter-on-quarter.
A growth in megadeals — including five transactions at or over $500 million — highlighted the shifting focus among VC investors towards larger, later-stage opportunities.
The Irish market
Ireland experienced its strongest quarter of VC investment in several years in the first quarter, driven primarily by large megadeals, including a $125 million raise by AI-powered productivity software company Tines, a $120 million raise by medical device company Fire1, and a $120 million raise by ocean data services company XOcean.
Fintech and medtech sectors in Ireland continue to attract significant interest from VC investors given their robust innovation ecosystems and strong talent base, with AI solutions also receiving significant investment over the quarter. While positive coming into 2025, the sentiment of VC investors in Ireland was one of caution in the latter half of the year amid rising geopolitical uncertainties.
Heading into Q2, deal volume may become subdued as investors in Ireland and globally exercise caution amid trade tensions with the US.
The implications associated with any US tariffs remain to be determined; both investors and startups are expected to be quite focused on assessing potential impacts on both general operations and potential expansion plans. "Despite these uncertainties, industries such as AI, health and biotech, and fintech are expected to maintain their appeal for investment and particularly for established start-ups with proven traction," he said.
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