Report finds Irish companies looking to scale face €1bn financing gap
Minister for Enterprise, Tourism and Employment, Peter Burke, has published a report that identifies a €1bn gap in financing for companies looking to scale and grow internationally in Ireland.
The report is titled “Market Demand for and Supply of Scaling Finance in Ireland” and was prepared by SQW Economic Research Consultants for the Department of Enterprise, Tourism and Employment.
It 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.
The estimated gap is about €1.1bn over the next 2 to 5 years.
The Report 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 also finds that the gap is particularly acute for –
Deals in the €5m - €10m 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.
It 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 that 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,” Burke said.
“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.
He added that the report “confirms and quantifies the gap in available finance for firms looking to scale up.
Minister Burke said that one of the key commitments in the Programme for Government is to help Irish businesses scale up and grow internationally (Pic: Leah Farrell/© RollingNews.ie)
“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.”
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