Venture capitalists are descending on the U.K. and Ireland this week to meet the cream of technology upstarts. They’ll be introduced to companies such as Belfast’s Lagan Technologies, a supplier of software for improving delivery of public services that has become a world leader in its market niche, beating rivals like Oracle for contracts with American cities from San Francisco to Boston.
Lagan is one of 30 companies pitching themselves to a group of more than 60 venture capitalists during the U.K. & Ireland Tech Tour on April 27-28. Many of the presenters are, like Lagan, later-stage companies that have already carved out successful global businesses. A surprising one-third of them are located on the Emerald Isle.
This week’s tour of the U.K. and Ireland is the 42nd such outing put on by the Geneva-based European Tech Tour Association, an independent non-profit organization that has been discovering and promoting early- and later-stage tech startups for more than a decade. It last held tours of England in 2004 and 2007, Scotland in 2001 and 2006, and the Republic of Ireland in 1999 and 2004.
What sets this tour apart from earlier trips is how many of the companies have already established themselves as world leaders in their fields, says Victor Basta, a veteran investment banker and president of the European Tech Tour Association. Basta is a former partner with London-based boutique investment firm Arma Partners, and now serves as an advisor to Magister Artis Capital, a London-based firm that provides merchant banking services for later stage companies and investors in growth industries.
The other major difference this time around is the number of Irish companies. Lagan is based in Northern Ireland, and another 10 of the startups that made the tour selection committee’s final cut are from the Republic of Ireland. That’s a disproportionately large number, considering that Ireland has a population of just 4.5 million, compared with 62 million in the U.K, says Basta. “What this shows is that multiple years of government focus on technology in Ireland, tie-ins with universities, an entrepreneurial spirit, and a local ecosystem of advisers and investors has created an ecosystem to rival [that of] Cambridge,” says Basta.
While many areas in Europe have tried and failed to recreate the success of California's Silicon Valley, Cambridge—sometimes dubbed "Silicon Fen"—is often cited as the place that has come closest. The English city is home to a large cluster of high tech businesses, many of which are connected to the University of Cambridge. Ireland's focus, says Basta, "seems more on building companies than technological innovation, and that cultural difference seems to be paying off." The Irish government also has done proportionally more to support entrepreneurs than Britain has, he says. "It's clear from the quantity and quality of the Irish candidates on this tech tour that their efforts are paying off handsomely."
Des Doyle, manager of growth capital for the government-run agency Enterprise Ireland, is proud of the high number of Irish companies on the tech tour. Enterprise Ireland notified local companies about the competition and urged them to apply, Doyle says. The Irish government has made a "huge commitment to supporting the entrepreneur," he says.
Among other programs, Ireland offers richer tax incentives than do many of its European neighbors for entrepreneurs who start their own companies and for investors who bet on ventures aiming at global markets. Through Enterprise Ireland, the government also directly finances start-ups—some 70 to 75 companies per year, at an average investment of €300,000 ($400,000) each—and makes indirect investments by putting money into seed and venture capital funds and defraying the operational costs of regionally-based angel networks.
For example, the eighth new fund supported through Enterprise Ireland's Seed and Venture Capital Program is comprised of a €17 million investment from the Bank of Ireland, €8 million from Enterprise Ireland, and €1 million from the University of Limerick Foundation. Managed on behalf of the Bank of Ireland and venture capital firm Kernel Capital, the €26 million fund launched last November invests in startup and early stage companies in the technology, food, and financial services sectors.
When you add up all of the efforts "you don't find that kind of government sponsorship in Cambridge or elsewhere in Europe," says tech tour president Basta. "It's worth looking at this in more detail because Ireland is producing a disproportionate amount of world-class start-ups."
Guest blog post from Jennifer L. Schenker.
This blog post was adapted from www.informilo.com. Click here to read the original posting, provided courtesy of Informilo.
