Thursday 21 March 2019

Ireland attracts the top tech firms but startups thrive elsewhere

Dublin is host to some of the biggest technology companies in the world, but only ranks among the third tier of European cities in terms of the number of tech startups.

No other Irish city even makes it that high into the rankings.

That's according to data prepared by the European Commission earlier this year.

And Europe in general lags behind the US in terms of the structures that support the sector.

Technology entrepreneurs in Europe have grown accustomed to flying economy class on the 11-hour haul to San Francisco.

The marathon of meetings with venture-capital firms in Silicon Valley is a ritual they must frequently undertake to raise money for their startups.

Simply put, that's where most of the cash is.

But, this is starting to change. The latest firm to make a big commitment to European tech is Berlin-based Earlybird Venture Capital, as reported by's Global Tech blog. LinkedIn Corporation co-founder Konstantin Guericke is joining Earlybird to provide a Silicon Valley perspective.

Mr Guericke (46) invested some of his own money into Earlybird's new $200m (€160m) fund aimed at European startups.

"We now have more ambitious entrepreneurs in Europe, and we need more ambitious venture capitalists," Mr Guericke said. He's looking for companies that "can be successful globally", rather than targeting local markets.

Plenty of those have sprung up in Europe recently, especially in Berlin and London.

Earlybird also has started going after Turkey, which looked like a much better market when the firm unveiled the $110m fund in January - before Prime Minister Recep Tayyip Erdogan got aggressive with internet censorship.

Throughout Europe, the difficulty will be to wade through the clones such as CityDeal - the German online-discount provider that Groupon bought in 2010 -- and find the startups with lasting appeal.

"Even Berlin's most advanced companies are just two or five years old," Ciaran O'Leary, an Earlybird partner in Germany who joined Earlybird in 2009, wrote in an email.

"Probably we will need another one or two years to start seeing the first large exits."

Venture capitalists put $7.4bn into European startups last year, an increase of 19pc, according to a report last month from London-based Ernst & Young. The investments there are overwhelmingly in consumer internet services, as well as information technology, the report said.

Balderton Capital, a tech investor based in London, announced a $305m fund focused exclusively on Europe. As Silicon Valley catches onto the opportunities in Europe, getting access to the rare gems could become more competitive. (Bloomberg)

Irish Independent

Also in Business