Irish-backed cyber-security VC seeks up to 20 start-ups
The world's biggest cyber-security VC fund has €320m to invest
Published 07/02/2016 | 02:30
Dubliner Alex O'Cinneide is backing a new €320m fund established by billion-euro US private equity firm Paladin Capital that is currently running the rule over 20 Irish technology start-ups specialising in cyber security.
As MD of Paladin Europe, O'Cinneide has also been joined by Irishwoman Dr Mary Aiken, a professor of cyber analytics, who inspired the US TV programme CSI: Cyber, in which she was played by Patricia Arquette. Dr Aiken was previously director of the Royal College of Surgeons' cyber psychology research centre here and is an advisor to the London-based fund, which is the largest global VC investor in cyber security.
O'Cinneide recently merged Gore Street Capital, the green-energy investment firm he founded - in which US hedge fund billionaire Paul Tudor-Jones was an investor - with Paladin Capital's €1bn group of investment funds.
Gore Street will retain its name and specific focus on investing in wind and solar energy and energy storage, though it is unlikely to invest here.
Although he declined to say how much money he had made, O'Cinneide has invested some of it in the new cyber-security fund. This is likely to be at least a few million, in keeping with what partners would typically invest in a VC fund. Paladin Europe will make investments from seed stage to series A and B, from €500,000 to about €5m.
Dr Aiken said: "Paladin has a particular interest in technologies, products or services that incorporate human factors in the cyber security equation. This is an important and continuously evolving research and development theme. Its new fund is a great opportunity for small to mid-sized Irish companies in this area who are seeking investment."
Mr O'Cinneide added: "We're currently assessing 20 Irish companies and are looking for early-stage firms with strong management teams and technology that is globally applicable for both the public and private sectors.
"We're happy to take technology out of university research labs and build it up from that level, if that's what it takes, and have done this previously. It's about what the company needs.
"We can also help more established Irish firms grow by bringing them to the US and introducing them to our network.
"Ireland has a lot of good entrepreneurs and there are good technologies coming out of the universities across the island, from Trinity and UCD to Queen's University in Belfast, for example.
"Companies such as global insurer Zurich have also established hubs in Dublin specialising in this area. The economy is strong in financial services and IT and our view is there isn't enough funding for early-stage tech firms. Corporate and government spending on cyber-security 'technologies of need' to protect critical infrastructure and proprietary information is growing. It's an opportunity for venture capital."
The internet of things, fintech, blockchain, threat analysis and big data, "where you're looking for a needle in a stack of needles" are all key areas of opportunity for cyber security start-ups, affirmed O'Cinneide - who previously ran the €225m Masdar Capital green investment division of Abu Dhabi's sovereign wealth fund.
A number of Paladin's board members and advisors have worked at the highest levels of defence, security and intelligence in the US and Britain. They include former GCHQ director Sir David Omand, former CIA director James Woolsey and retired NATO commander and US army General Wesley Clark.
Cyber security is a rapidly growing investment sector, according to research firm CB Insights, which say €11.5bn was invested over the past four years.
The market is growing by about 5pc a year, according to research firm Gartner, which forecast that information and cyber security spending will exceed €250bn by 2020. The US government alone spent €90bn on it over the past decade, and has budgeted €13bn for it this year.
Sunday Indo Business