According to the “VenturePulse” report by the Irish Venture Capital Association (IVCA), funding for the last three months of 2025 was down by 46pc to €291m.
On an annual basis, the figure fell by 23pc to €1.1bn.
“The fourth quarter saw a 71pc retreat from the Irish market by international investors from €470m to €132m,” IVCA chairwoman Caroline Gaynor said.
“This may be due to an ‘America first’ focus, negativity from across the Atlantic about Europe and the impact of a weakening dollar.”
Sarah-Jane Larkin, director general of the IVCA, said the dominant pull of AI start-ups in the US was also a factor.
“Another reason for the decrease in international funding may be that US investors may be overly focused on local AI opportunities,” she said.
Unicorn status is being achieved by early stage start-ups in generative AI in the US much quicker than in the past
Data from the funding analysis platform Pitchbook shows that in 2025, over half of all start-up venture funding was into AI firms and that 80pc of that was in the US.
“The amount of money being invested there [into AI] is sucking up a lot of venture capital,” Ms Larkin said.
”Unicorn status is being achieved by early stage start-ups in generative AI in the US much quicker than in the past.”
Ms Larkin said that the decline in overseas funding in 2025 is reflected in the 33pc fall in larger deals in the €30m-plus category to €541m. In the fourth quarter, this category fell by 69pc to €111m.
Funding in the €10m-€30m range for the range for the year overall also fell, by 14pc to €269.4m.
The IVCA data shows that funding in the €3m-€5m category rose by 39pc to €114m. There was a small decline (3pc) in the €1m-to-€3m range to €102m.
Seed funding, or first rounds raised by SMEs, dropped by 5pc to €141m, the report found.
Life-science companies attracted most funding in 2025 in Ireland, raising €461m, or 40pc of the total. This was followed by software with €156m (14pc), cyber security with €136m (12pc), AI and machine learning with €104m (9pc) and fintech with €96m (8pc).
In all, 186 deals were completed in 2025, down from 217 deals in 2024, a fall of 14pc.
source