- By Region
Ireland hosts some of the world’s most successful multinational technology companies. But amid the shiny office blocks of the likes of Google, Microsoft and Facebook, there are a growing number of companies that are just setting up, raising hopes that Ireland may one day produce the next tech giant.
“It is really vibrant at the moment with an extraordinary level of start-up activity,” says Chris Horn, co-founder of Iona Technologies and an angel investor in early-stage tech companies.
“Innovation and skills are spinning out of the multinationals and to a certain extent Irish universities. And there is more venture capital money available to support start-ups than ever before,” he says.
Technology is one of the few sectors of the Irish economy that is flourishing amid an economic crisis that forced an international bailout in 2010. More than €500m has been invested in 315 technology companies in the past two years, according to the Irish Venture Capital Association.
Datahug, a company that helps organisations manage their email, raised $1.5m last autumn from a combination of Irish investors and the Silicon Valley angel investor Ron Conway.
“There has been a welcome increase in the number of angel investors in Ireland,” says Connor Murphy, founder of Datahug.
“These are people who have sold their own companies and are willing to invest in start-ups without some of the bureaucracy that other seed funds demand.”
Enterprise Ireland, the state agency tasked with fostering indigenous industry, says it will make 95 investments this year in promising start-ups – companies with potential to turn over €1m within three years. It has introduced an entrepreneurship programme to offer overseas tech start-ups investment if they relocate to Ireland.
“By bringing in foreign talent we add to the diversity and skills base of the start-up community,” says Tom Cusack of Enterprise Ireland. “Within a few years we hope this programme will make up 20 per cent of our overall investment in start-ups.”
The booming multinational sector has created a large pool of skilled people willing to take the risk to set up their own companies.
Profitero, a Dublin start-up that develops technology for retailers to monitor their competitors’ prices, was founded by former employees of Google and IBM in Ireland from Ukraine and Belarus.
“It is very easy to start up a company in Ireland, which is a big advantage. We also found it easier to raise money in Dublin than in London,” says Volodymyr Pigrukh, co-founder of Profitero.
But finding good software engineers can be challenging, he says, because the presence of so many multinational companies means competition for talent is strong. This recently prompted Profitero to move its software engineering team to Minsk, Belarus, while maintaining its headquarters in Dublin.
Although multinationals compete for important staff, many large tech companies offer start-ups mentoring and incubators, and in some cases license them non-core technology.
Mobile phone operator Telefónica is establishing an incubator for start-ups in Dublin. Its Wayra scheme, which already operates in 11 countries, offers a $50,000 investment, mentoring and office space in return for a 10 per cent stake in the company.
“The beauty of this is that we have 300m customers worldwide, which can be a fantastic distribution channel for start-ups,” says Jonnie Cahill, marketing director with O2 Ireland, part of the Telefónica group.
Noel Ruane, who runs the European arm of Polaris Venture Partners, a US venture capital company, says the proximity Dublin offers to the likes of Microsoft and Google can be useful for start-ups seeking to develop technology on their platforms.
Last year Polaris set up its first non-US based incubator for start-ups in Dublin. Ten of the first 16 companies to base themselves at the Dogpatch labs facility have raised money. Two of the investments were made by Polaris, says Mr Ruane.
“I see no reason why the next Skype cannot come from the likes of Ireland,” he says.