Companies in Northern Ireland raised £18.2 million (€20.6 million) in capital last year, up 22 per cent on the prior year, according to new data.
Overall, 22 deals were recorded in the North by investment data platform Beauhurst, the largest growth in proportion of UK deals since 2011.
Moreover, the research shows UK government investment, which has accounted for the vast majority of deals in the region since 2012 tailed off significantly to the extent that just two of them received such backing last year.
"Based on 2017 deals, Northern Ireland looks to be particularly strong in both artificial intelligence (AI) and biotechnology, so it's likely that growth and larger deal sizes will come from those sectors in the future," Henry Whorwood, senior consultancy associate at Beauhurst told The Irish Times.
The top fundraising deal in Northern Ireland as recorded by Beauhurst last year was for B-Secur, a Belfast-based firm that has developed patented biometrics using human heartbeats. It raised £3.5 million in from a syndicate of investors which included Accelerated Digital Ventures (ADV) and Kernel Capital.
RepKnight, a developer of social media analytics technology secured the second highest investment at £3 million. SiSaf, a company that has developed a transdermal drug delivery system with potential applications in the treatment of skin conditions, was ranked third after raising €1.04 million.
The average raise by Northern Ireland-backed companies in 2017 totalled £958,000.
According to Beauhurst, last year marked a record investment of £8.27 billion into UK start-ups, twice as much as in the prior year.
It was also a record year for so-called “megadeals,” that is investments totalling more than £50 million. Overall, there were 29 such deals with foreign investors backing 79 per cent of the investments.
Mr Whorwood suggested the influx of foreign capital into the UK, was of benefit to start-ups in the Republic.
“In 2017 we saw increased international interest in the UK as a whole, so when it comes to late-stage Irish companies - particularly those in fintech and AI, two of the most popular sectors with international funds - it makes sense to be open not just to investment from the UK, but from the world,” he said.
"The fact that Business Growth Fund (BGF), the UK's largest growth-stage funder, has just opened an office in the Republic of Ireland is a hugely promising sign for Irish start-ups," Mr Whorwood added.
