Although Irish firms were able to secure a quarter of a billion euros through venture capital, a slowdown in activity in the fundraising market is being seen in the country, the Irish Examiner reported.

Citing the annual Irish Venture Capital Association VenturePulse figures, venture capitalists invested €285 million to Irish firms. This represented a 6% rise from the figures the year before. Companies focused on software, pharmaceuticals, medical devices and biotechnology got most of the financing, the report said.

IVCA Chairman Mark Horgan told the Irish Examiner that venture capital is necessary to developing the country's home grown technology firms. He said, "Venture capital is playing a vital role in fuelling the growth of Ireland's indigenous technology sector. Venture capital-backed companies tend to grow faster, employ more graduates and generate higher levels of exports than other indigenous SMEs."

However, the funding activity is not getting any traction. Stephen Keogh, a corporate partner with William Fry, who led Irish startups in 40 financing rounds in 2013 was quoted in the report as saying, "Irish venture capital firms are entering the end of the investment term within their existing funds. New capital will need to be raised from the private sector to fund SMEs into the future."

Keogh also thinks that this would be a good time for Irish pension funds to pour a portion of their €80 billion funds into venture capital as existing funds have started to decline. He added, "Because of low returns from cash and bonds, pension funds are seeking alternative investments. Right now, as an asset class, venture capital is offering a good investment opportunity."

Meanwhile, IVCA Director General Regina Breheny believes that it is also time to restock the seed funds backed by lenders and Enterprise Ireland as these have been important in the success of the Irish venture capital sector, the report said.