Over the last 10 years, Ireland has emerged as a significant player in the start-up space, with a strong focus on leading-edge and disruptive technologies.
Ireland’s world-class start-up ecosystem and skilled entrepreneurs were celebrated last week at Start-Up Showcase 2020. The event, organized by Enterprise Ireland, the trade and innovation agency, brought together 127 companies in which it had invested in 2019, to the tune of €24 million.
Ireland is steadily building an impressive pipeline of high potential start-ups (HPSUs) that are benefitting from a highly developed start-up ecosystem, an unrivaled culture of connectivity and innovation, and a broad range of supports from Enterprise Ireland.
“Strategically, start-ups are critically important to the Irish economy, as they operate at the leading edge of innovation,” says Niall McEvoy, manager of the HPSU ICT team at Enterprise Ireland.
“Among the start-up companies that we support every year, there will be some that go on to be the great Irish companies of the future that are globally scaled and internationalized. So it’s absolutely critical to the future of the economy that the State and other funders continue to invest in start-ups.”
It’s that rationale that has made Enterprise Ireland unique in a global context in being a significant investor in early-stage businesses. In fact, Pitchbook recently ranked it the number one investor in Europe and number two in the world for the number of investments in start-ups in 2019, by VC deal count.
Supporting start-ups through early challenges
Every start-up faces similar key challenges: refining the product to attain optimum product-market fit, fundraising and, once market validation is achieved, building a company that can deliver real scalable growth.
“Enterprise Ireland has a wide suite of programs and financial supports, as well as a team of advisers that have built up a huge bank of experience around helping our clients overcome these early challenges,” explains McEvoy. “We work with start-ups at the pre-seed/validation stage and also at the seed and scaling stage.
“Our pre-seed support focuses on mentoring, helping companies with market intelligence, skills development, and customer engagement all the way up to starting to win business and preparing for investor funding. Financially we support pre-seed companies via our Competitive Start Fund, and through feasibility funding and Innovation Vouchers.”
Stage 2 support is about accelerating the early-stage growth of the company, Enterprise Ireland is a significant direct investor at this stage through its iHPSU funding mechanism and also participates in follow-on investment at Series A stage for those companies making the most progress.
“As well as this financial support, we have an extensive network of international offices that start-ups can work with to explore overseas markets,” says McEvoy. “That’s a key differentiator when you compare Enterprise Ireland with other agencies around the world.
“Companies also get very intensive advisory support and we encourage peer-to-peer learning, for example through the HPSU Founders Forum, which connects companies to each other, and to previous generations of entrepreneurs.”
The strength of the ecosystem
McEvoy believes that one of the things that makes Ireland such a great place to start a business is how connected the ecosystem is.
“Enterprise Ireland is a significant player but you also have VCs and accelerator and incubator programs across all of the key verticals that help companies test, validate, grow and attain product-market fit,” he says. “It’s very much about the power of the network and the wider connectivity to investors, to other entrepreneurs and to international market opportunities.”
Connectivity to universities and research centers is also important. Last year, 13 of the start-ups supported by Enterprise Ireland were spin-outs from third level organizations.
“A lot of innovation is coming out of research labs; through our Commercialisation Fund and other supports Enterprise Ireland provides the conduit to spin-out and turn the research into real-world, commercial opportunities.”
There’s also a healthy interest in start-ups within Ireland’s multinational business community, which recognizes the value of the innovation and disruption that are a natural part of the start-up arena.
“The level of collaboration between indigenous companies – established and start-up – and multinational companies has never been greater, particularly through initiatives like the Disruptive Technologies Innovation Fund, which encourages indigenous companies, multinationals and third-level institutes to work collaboratively,” says McEvoy.
Ireland has a growing global reputation as a tech hub and this, says McEvoy, is down to the emergence of technically strong and focused start-ups.
“To be a strong tech hub it’s not just about having the people, you need to have resources, education and training, and the connectivity. Whether a new HPSU is emerging from an indigenous company that has already scaled or whether it’s emerging from university or from the multinational sector, they all need to be able to progress rapidly and get the supports that come from the ecosystem. The strength of the ecosystem is absolutely key.”
Sectors and standouts
ICT continues to be the dominant sector for Irish HPSUs, with some 70% of new companies funded last year falling broadly into this category.
“Fintech has been particularly strong, and in recent years we’ve been seeing a growing focus on deeptech. A lot of our early-stage companies are starting to employ artificial intelligence and machine learning in their software solutions. That’s a very strong and exciting trend,” says McEvoy.
Dublin company, Aylien is one such company. Its AI-powered news intelligence platform digests the world’s news content and identifies what matters to a business with human-level accuracy. Artificial intelligence is also at the heart of EdgeTier’s technology, which increases the efficiency of customer service centers by helping human agents to respond to customer queries by suggesting responses and providing context-sensitive and personalized data.
In the medtech / life sciences sector, which after ICT is the next biggest focus for Irish start-ups, Nuritas is combining artificial intelligence and genomics to discover and unlock natural bioactive peptides with health benefits.
“I believe that Ireland is punching above its weight in terms of the strength of its start-up ecosystem and the cutting-edge innovation that is driving new company establishment and growth,” says McEvoy.