Ireland could mobilise €1 billion in private institutional capital to support homegrown startups and scale-ups under a new fund-of-funds proposal from the Irish Venture Capital and Private Equity Association (IVCA), as the country looks to reduce its dependence on overseas investors for growth-stage financing.
The proposal forms part of the IVCA Pre-Budget Submission 2027, which calls on the Irish Government to establish a government-convened investment vehicle capable of aggregating commitments from pension funds, insurers, banks and other institutional investors.
Sarah-Jane Larkin, Director General of the IVCA, says: “VC investment in the quarter fell by almost 60% to just over €221 million with 85% of the capital raised coming from international investors. That combination points to a market with strong companies and real investor interest, but one that remains heavily dependent on external capital conditions.”
Founded in 1985, the IVCA represents Irish-based venture capital and private equity firms, alongside their investors and professional advisers.
According to them, IVCA members have provided more than €10 billion in funding to innovative Irish companies over the past decade, supporting areas including technology, life sciences, MedTech and other export-focused industries.
EU-Startups’ coverage of Irish funding announcements in 2026 points to approximately €350.4 million in funding. The total is concentrated in a relatively small number of larger transactions: Fonoa, Neurent Medical, Equal1 and CameraMatics account for up to €256.9 million, or around 73% of the headline sum, while smaller Seed and pre-Seed rounds have continued across AI, HR software and industrial climate technology.
The association argues, however, that Ireland’s startup ecosystem continues to face a significant shortage of domestic capital at later stages. Its document identifies funding gaps at late Seed, Series A, Series B and subsequent scale-up rounds, warning that Irish companies frequently turn to overseas investors as their capital requirements increase.
At the centre of their proposal is a government-convened fund-of-funds inspired by Denmark’s Dansk Vækstkapital model.
Richard Watson, Chairperson of the IVCA, says: “And this can be implemented quickly as we have an off the shelf working example in the Danish Dansk Vaekstkapital model which has pumped more than €1.5 billion into domestic companies.”
Under the IVCA’s proposed structure, the Irish Government would act as a convener and potentially an anchor investor through the Ireland Strategic Investment Fund (ISIF) or a newly created vehicle.
Institutional investors would make multi-year commitments to approved Irish venture and growth funds, while individual investment decisions would remain under private sector-led governance and commercial management.
Richard adds: “Ireland has a good track record in getting startups off the ground thanks to government initiatives through EI (Enterprise Ireland) and ISIF (Ireland Strategic Investment Fund), but the gap in institutional scaling finance means that these companies usually have to go overseas to raise the capital necessary to grow into major employers.”
The IVCA also sees the proposed Personal Investment Account as a potential future source of capital for the ecosystem. It argues that, over time, a professionally governed fund-of-funds could provide a route for allocating a modest share of household investment savings to productive domestic assets, alongside more conventional market investments.
The association is also calling for changes to pension architecture. One recommendation proposes an opt-in provision for new entrants to Ireland’s auto-enrolment pension system, allowing savers to allocate a small proportion of their contributions to a vehicle supporting Irish enterprise.
The association stresses that the proposal is intended to catalyse private investment rather than create a major new public spending programme.
Sarah-Jane says: “At a time when all government departments are facing spending pressures, crucially, this can be done without material Exchequer cost. The objective is not to create a new spending commitment, but to use a limited portion of existing ISIF capital strategically to convene, structure and catalyse much larger pools of private investmen.”
Ireland would not be acting in isolation. The IVCA compares its proposal with several European initiatives already attempting to channel institutional savings towards venture capital and private markets. These include:
For the IVCA, these initiatives point towards a wider European effort to mobilise pension and institutional capital for innovation, at a time when European policymakers are increasingly concerned about promising companies having to seek large growth rounds elsewhere.
Sarah-Jane adds: “This would help create the financial foundations for more indigenous companies to scale from Ireland, deepen domestic ownership of innovation, and build a stronger base of employers over time. This is therefore not only a response to a funding gap, but a time-sensitive opportunity to strengthen the long-term structure of the Irish economy.”
The proposal now depends on whether the Irish Government chooses to incorporate the recommendations into Budget 2027 and move towards placing Ireland firmly within the wider European debate over how to keep more startup and scale-up financing, ownership and economic value within the continent.
Source: EU-Startups
