Tech sector investment in Northern Ireland reaches record levels

Belfast city center pictured at dusk with town hall in distance.
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Investment into tech firms in Northern Ireland reached its highest level ever last year, surpassing £143.2 million.

The record investment was spread across 72 deals, according to figures from Catalyst’s NI Deal Tracker report, which also reported an average investment of £1.99 million.

This, the report found, shows a significant increase compared to 2022, when a total of £139 million was invested across 89 deals.

Across 2023, there were seven deals reaching a value of more than £5 million, 23 between £1 million and 5 million, and 12 transactions of between £500,000 and£1 million.

Many of the larger deals were follow-on rounds from existing investors who were willing to back existing positions, including a number by UK Future Fund. Other major deals were completed by groups of local private investors and business angels.

Kieran Dalton, head of scaling at Catalyst, said the increase shows continued confidence in the Northern Irish technology sector, which appears to have weathered a notable global downturn.

“While the increase in venture capital investment into Northern Ireland companies was relatively modest in 2023, it is still very encouraging set against the continuing drop in activity in the wider UK venture capital investment market.”

"Equity funding in Northern Ireland has been very resilient, with many of the larger deals consisting of follow-on investments from existing investors who have been willing to back their existing positions. 

"At all levels, from Seed to Series B, many of the larger investments were delivered by a community of investors spanning individuals, corporates, management and institutions."

Northern Ireland's tech sector has been booming in recent years, with the cyber security sector alone accounting for a workforce of more than 2,000 people working across 100 different kinds of active cyber security businesses in 2022.

Earlier this year, a new Cyber-AI Hub was announced for Belfast following an £18.9 million government investment package.

According to HSBC, VC funding in tech companies in Belfast rose by 221% between 2019 and 2023. Similar research from Invest Northern Ireland found the region is the leading international investment location for US cyber security firms, with Belfast named as one of the world's top 15 Digital Economies of the Future.

Catalyst noted that growth in investment in Northern Ireland companies comes despite a challenging economic backdrop, which saw over a decade of historically low interest rates come to a sudden end.

"Less than ten years ago Northern Ireland registered only £5 million of venture capital investment into local companies in a year. Last year there were seven deals where companies raised more than that amount on their own,” said Steve Orr, chief executive of Catalyst.

“This is a testament to the quality of our startup founders, but also demonstrates the increased understanding amongst investors of what Northern Ireland’s ecosystem has to offer.

"Northern Ireland has consistently proved that it can produce innovative companies with high growth potential worthy of capital investment and I expect this interest will continue to grow in future."

Emma Woollacott

Emma Woollacott is a freelance journalist writing for publications including the BBC, Private Eye, Forbes, Raconteur and specialist technology titles.