The results for the first quarter of the European Venture Capital Report 2005 produced by Ernst & Young and Venture One, indicate that Ireland experienced a 35% increase in venture capital investment, from the €31.23 million in Q1 2004, to €42.11 million in Q1 2005. The €42.11 million invested in the first quarter of 2005 is also an increase of 97% from the last quarter of 2004, when the amount invested was €21.37 million. Information technology deals continue to dominate the Irish venture capital landscape, with seven of the eight deals completed and 85% of the total funds invested in this sector. The largest investment in Ireland was in Corvil Networks, a provider of a technology for measuring and controlling the bandwidth requirements of IP traffic flows. The company raised €15 million in a later stage round.Ireland had a total of eight deals this quarter, down from ten deals in Q4 2004 and Q1 2004. As throughout 2004, Ireland retains its 7th place in the first quarter of 2005 for number of deals. In terms of amounts raised, Ireland has slipped down to 8th place, mainly due to increased venture capital activity in Denmark . In Europe , venture capital investment increased by 19% to €880.3 million. Whilst the European investment figures are up on this period last year the deal flow in  Europe has dropped to less than 200 deals, a 27%, decline Garry O’Rourke, Senior Manager, Ernst & Young Corporate Services Department. By industry, the amount invested into European information technology (IT) companies climbed upward, reaching a total of €407.3 million, an increase of 16% over this quarter a year ago. Gil Forer, global venture capital advisory group leader for Ernst & Young said: “While not reflected in the Irish figures for this quarter, the capital invested in the information-services segment nearly doubled from the first quarter of 2004 to reach €40 million. The majority of information-services companies are Internet-related, so the investment trend in this segment could indicate we are entering Internet 2.0 – with a resurgence of interest in online businesses.”The 2004 trend of increased investment activity in seed and first-round deals declined this quarter. These deals represented one-third of the investments made in Q1 2004 and continued to grow throughout last year, but only represented 29% of the deal flow this quarter. They also accounted for only 20% of the capital invested, compared to 25% this quarter a year ago. In Ireland , this translates to a decline from €11.88 million to €6.55 million.

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