Commentary: The ‘Irish’ Startup Attribution Problem

Irish Startup Attribution Problem Flag

Irish startups are flying high, but their VC investments stay under the radar…

At the Kauffman Fellows European VC conference in Dublin recently there was a panel discussion on what’s happening in Europe’s tech hubs, comparing venture capital activity across Europe and Israel.

Even at first glance, the figures presented in this slide looked off to me:

graphIt suggests that only $30m of Venture Capital was invested in Irish tech companies in the second half of 2014. That would imply a very small VC market in Ireland. Thankfully, its not the reality and it would seem sources like Pitchbook, CBInsights and VentureSource have it wrong. They put Ireland’s startup investments on a tier with Belgium when in reality they’re much closer to the level of Sweden.

The Irish Venture Capital Association (IVCA) data tells a more complete story. In Q3 and Q4 of 2014, VC firms and angels invested $206M in Irish companies, $125m of this was in tech startups. Medical Devices, Life Sciences and undisclosed investments make up the balance

$30M or $125M?

So what is happening and is Ireland getting the credit it deserves as a tech economy?

One explanation is that successful Irish tech companies have a skewed geographic profile. This presents a data gathering problem for the data companies but its also a strong indicator of the market reality for Irish startups.

The size of the local market and a focus on software business in particular means many Irish startups are transitioning to the US (some earlier and with more commitment than others), and getting backed by a spectrum of local and international VCs.

Screen Shot 2015-04-01 at 01.38.03

It’s difficult to attribute Stripe as an Irish born success (even though the founders are just about hanging on to their Irish accents in San Francisco). Much less so other startups such as Logentries, Fieldaware or Swrve who started and maintain significant business and engineering operations in Ireland. Correctly, breakout Irish startups position themselves as US companies because that’s where their market is.

But its also where a mixed attribution problem can arise. In turn the investment stats don’t get allocated or aggregated and a full picture of activity doesn’t emerge.

Further analysis of IVCA’s data makes for interesting reading. A total of $450m was invested in Irish startups in 2014 across 118 companies. The top 10 Irish tech startups, by funds raised, took in $140M.

  1. AMCS Group – $32M (Highland Capital)
  2. FieldAware $24M (Openview, Atlantic Bridge, Oyster Technology Partners, WestSummit, SVB)
  3. Intercom $23M (Bessemer, Social + Capital)
  4. Brandtone $18M (Unilever Ventures, Verlinvest)
  5. MCOR Technologies $15m (Wheb Partners)
  6. Bitnet Tech $14.5M (Highland Capital)
  7. Swrve $10M (Acero Capital, Atlantic Bridge, Intel Capital)
  8. Accuris Networks $10M (Atlantic Bridge, Summit Bridge)
  9. Profitero $8M (Polaris Partners, Delta Partners)
  10. Boxever $6M (Polaris Partners, Frontline Ventures)

Ireland looks to be sustaining interesting growth of its VC market with startups heavily influenced by the pull of the US.

Meanwhile US tech companies continue to flock east and expand their Irish teams. Record staff growth led by giants Google, FaceBook, Amazon and newer arrivals such as LogMeIn, AirBnB and AdRoll bodes well for an exciting tech ecosystem still very much in development.



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