INDIGENOUS FIRMS in the technology sector raised €161.9 million from investors in the first half of 2011, an increase of 58 per cent on the same six-month period a year earlier, according to the Irish Venture Capital Association (IVCA).

However, the association has warned that local venture capital companies may start to run out of funds from next year which would have a serious impact on the future expansion of the State’s tech sector.

It estimates there could be a shortfall of €1.5 billion 2012-2016 to fund expansion of start-ups that have received early stage funding.

Overall, 86 firms raised funds during the first six months of the year, compared to 82 in the same period last year and 66 in 2009. Amounts raised ranged from €100,000 to €20 million.

The association’s VenturePulse survey shows first-round funding remained steady at 19 per cent of all funds raised.

In the first half of 2011, 40 companies in the business service sector raised €56.8 million, equivalent to 35 per cent of all funds raised.

Eight companies in the environmental technology sector raised €41 million, while 13 in the drug delivery and medical device industries raised €25.5 million.

In the communications and telecoms sectors, 10 firms raised funding of €25.3 million, while six companies in the pharma/biotechnology industry raised €5.9 million.

The largest deals announced during the period were by PCH International, the technology manufacturer which has its headquarters in Cork, and the Limerick firm Wind Energy Direct, which both secured venture capital funds of €20 million each.