KPMG finds investors continue to focus on later stage companies and scale-ups with ‘very strong value propositions’.
Apprehensive of tariff impact, VC caution slowed down investment in Ireland in the second quarter this year. Although, Irish fintechs proved resilient.
20 VC deals were closed in Ireland in Q2 2025 at a value of $136.4m, according to the latest KPMG Venture Pulse report. This marks a considerable decline from the previous quarter, where 28 VC deals bagged $668m, led by three major deals that each exceeded the $100m mark.
These included the $125m investment secured by AI productivity software company Tines, one of Ireland’s current big success stories, with a current valuation of more than $1bn. It was followed closely by the $120m raise by medical device company Fire1, and the $120m raise by ocean data services company Xocean.
Although, tariff-related caution among VCs is a global trend this quarter, and KPMG deal advisory partner Gavin Sheehan comments that the slowdown comes as investors wait for “greater certainty at a macro level particularly in respect of US tariff policy”.
The downturn is, however, only expected to be short-lived. Sheehan explains, “Investor sentiment and outlook for H2 2025 remains cautiously positive, in part because Ireland’s VC ecosystem has a strong focus on software companies, which have less direct exposure to US tariff risks causing so much uncertainty globally, but also because of the strength of Ireland’s innovation ecosystem and the positive valuations that have been garnered by Ireland-based start-ups in recent months.”
Overall, in Europe, VC investment remained somewhat steady at $14.6bn in Q2 2025, down only slightly from $16.3bn in Q1 2025. This was despite a considerable drop in the number of deals from 2,358 to 1,733, the Venture Pulse report found.
The finding tracks with other reports, including EY’s latest Generative AI Key deals and Market Insights study, which found that VC investment into GenAI surged to nearly $50bn in the first half of 2025 despite a near 25pc drop in the total number of transactions.
KPMG, today (2 September) finds that VC investors in Europe are showing continued interest in start-ups with clear commercial traction, especially in the AI space. Although, global VC investment fell from considerably from $128.4bn across 9,314 deals in Q1 2025 to $101bn across 7,356 deals in Q2 2025.
Fintech still strong
However, while other sectors bore the brunt of investor caution, Ireland’s fintech industry attracted a significant amount of VC investment in Q2 – found KPMG’s Pulse of Fintech report – with big deals including NomuPay, which raised $40m, Wayflyer, which raised $35m and Kota, which raised $14.5m.
“Irish startups, particularly in the fintech space, have continued to successfully raise capital during the quarter and we continue to see growing interest in startups developing AI led solutions particularly where applications drive industry specific solutions,” Sheehan said.
In the first half of the year, 13 fintech deals were closed in Ireland at a value of $173m, a more than $30m raise from the same time last year.
However, total global fintech investment fell from $54.2bn across 2,376 deals in H2 2024 to $44.7bn across 2,216 deals in H1 2025.
“While the first half of 2025 posed challenges for the global fintech sector, with ongoing geopolitical instability, Ireland has proven resilient,” said Ian Nelson, the head of financial services at KPMG Ireland.
“There is clear enthusiasm here for innovative business models and emerging technologies, and we anticipate this positive momentum to carry on through the rest of the year.”
Meanwhile, the Europe, Middle East and Africa region grew its fintech investment by more than $2bn to $13.7bn this past half year across 759 deals. The UK alone attracted more than half of that investment, bagging $7.3bn on its own.
KPMG found that investors continued to focus on later stage companies in Europe with proven business models and scale-ups that displayed “very strong value propositions”.
Dave Remue, the director and head of fintech at KPMG Belgium commented, “EU regulatory compliance is complex, raising costs and stifling innovation, as noted in the Draghi report,”
“Starting in 2025, the European Commission plans to implement measures like regulatory simplification, expanded sandboxes, and substantial additional funding through TechEU and the European Innovation Council.
“I am optimistic that these steps will unlock new opportunities and drive fintech growth and innovation.”
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