Ireland urged to unlock €1 billion for startup funding with Denmark-style capital push

The Irish Venture Capital and Private Equity Association (IVCA) has proposed a new fund-of-funds initiative to mobilize €1 billion in private institutional capital for Irish startups and scale-ups. This proposal, included in the IVCA's Pre-Budget Submission 2027, aims to reduce Ireland's dependence on overseas investors for growth-stage financing.

Currently, VC investment in Ireland fell by nearly 60% to €221 million, with 85% of capital raised coming from international investors. The IVCA argues that there is a significant shortage of domestic capital at later stages of startup development, with companies frequently turning to foreign investors as their capital requirements increase.

To address this, the IVCA proposes a government-convened investment vehicle that could aggregate commitments from pension funds, insurers, banks, and other institutional investors. Denmark's Dansk Vækstkapital model serves as a model for this proposed structure. If implemented, Ireland could follow the lead of several European countries, such as France, Denmark, the UK, Germany, and the Netherlands, in channeling institutional savings towards venture capital and private markets.

The IVCA also suggests changes to pension architecture, such as an opt-in provision for auto-enrolment pension systems, to support Irish enterprise. This proposal seeks to catalyze private investment without creating a major new public spending program, with the goal of fostering the long-term structure of the Irish economy.