Minister Burke publishes report identifying a €1 billion gap in financing for Irish enterprises looking to scale up and go international
- Published on: 31 July 2025
- Last updated on: 31 July 2025
Minister for Enterprise, Tourism and Employment, Peter Burke, today published a Report entitled “Market Demand for and Supply of Scaling Finance in Ireland”.
The Report concludes that there is a gap in equity financing for Irish enterprises at the point where they are looking to scale up their businesses and realise their potential. It estimates that gap at about €1.1 billion over the next 2 to 5 years. It finds that demand for equity finance amongst scaling firms has increased in Ireland over the last decade and expects that trend will continue.
The Report, which was prepared by SQW Economic Research Consultants for the Department of Enterprise, Tourism and Employment, also finds that the gap is particularly acute for:
- deals in the €5 million - €10 million range;
- capital and research and development intensive sectors, where typically the most innovative start-ups are;
- firms requiring patient, long term, capital investment, such as those in sectors where product development can be lengthy
The Report goes on to describe other features of the gap and identify several factors that contribute to firms failing to secure adequate finance.
Commenting on the Report, Minister Burke said:
"One of the key commitments in the Programme for Government is to help Irish businesses scale up and grow internationally, retaining a substantial workforce here as well as building abroad. Ireland ranks highly in Europe for the number of start-ups, many of them truly pioneering. So, we have an excellent starting point to delivering on that commitment.
"I know from my engagement with enterprises across the country, that one of the key challenges they face is a gap in accessing capital. It can be the reason preventing them from realising their potential and growing into large, even multinational, businesses.
"The Report published today confirms and quantifies the gap in available finance for firms looking to scale up. The Report also provides us with insights on the nature, as well as the size, of that gap.
"These findings will inform the development of appropriate and targeted policy measures, which I intend to bring to Government later this year."
The Report can be found at: Market Demand for and Supply of Scaling Finance in Ireland
Notes
The Department of Enterprise, Tourism and Employment commissioned SQW Economic Research Consultants to conduct a market analysis to quantify the scaling finance gap.
SQW, supported by Middlesex University in London and the Oxford Innovation WorkIQ in Dublin, conducted research to define and quantify the market gap for Irish firms seeking equity capital to scale up their enterprises. The focus was on equity finance – venture capital (VC) and private equity (PE) – covering deal sizes from €2 million to €50 million for innovative firms in their late-stage growth phase.
The study gathered evidence through an e-survey of ‘potential scale-up firms’ in Ireland (166 responses); and interviews with fund managers, stakeholders and Irish firms. Across these interviews, feedback was obtained from nearly 60 individuals. The fieldwork was supported by analysis of private market data from PitchBook relating to potential scale-up firms in Ireland, investment funds, and fund managers (these data are not comprehensive).
The market gap (defined as the sum of ‘unmet’ and ‘discouraged’ demand) for scaling firms in Ireland was modelled using ‘Monte Carlo’ simulations: a statistical technique that helps to address the uncertainty associated with firm e-survey responses and the modest sample size. Monte Carlo simulated the likely equity needs and outcomes of fundraising at the firm level for an assumed population of potential scale-ups in Ireland (1,000 companies).
The report concludes that the equity market gap, for scaling firms in Ireland, is estimated to be approximately €1.1 billion over the next 3 to 5 years.
They also identified the gap is:
- particularly acute for deals in the €5 million - €10 million range;
- from Series A and especially Series B+;
- for capital and R&D intensive sectors;
- for firms requiring patient capital investment
The report found that the demand for equity finance amongst scaling firms has increased in Ireland over the last decade, including for larger deal sizes, and is expected to continue. The pace of funding delivery can be challenging, whether through slow release of finance or the peak and trough nature of its release however, transaction costs were generally not perceived to be a barrier on the demand or supply side.
Additional contributing factors resulting in the lack of securing funding include:
- undercapitalisation at earlier stages;
- firms not hitting their scaling metrics to secure funding;
- firms not able to recruit the personnel who have the capabilities to secure later stage financing and scale-up;
- Irish firms tend to ask for less than they need to scale;
- risk aversion
On the supply side, the report found that most Irish funds are too small to execute scaling strategies or lead larger deals at later stage, especially in the range before international capital comes in. These Irish funds are smaller in size compared to their European counterparts. The average fund size in Ireland is just under €70 million and Irish VC funds are even smaller at €60 million on average. According to stakeholder consultees, an optimal fund size to execute a scaling strategy is in the region of €200 million -€300 million. The lack of institutional capital is another barrier to increasing fund sizes.
There are only a limited number of funds actively investing in later stages with average deal sizes in Ireland at €6.5 million compared to the European average of €8.9 million. For many VCs, the focus was on earlier stage investment with only some follow-on at later stage.
Next steps
The department is developing proposals for actions to address the gap. The Minister intends to bring those proposals to Government later this year.