Irish software firms and tech start-ups currently outperforming the world in terms of attracting funding
It's a good time to be in the tech industry, writes Technology Editor Adrian Weckler - but it's an even better time to be an Irish hi-tech firm seeking investment
Irish tech companies are bucking a global slowdown in tech valuations by doubling the cash raised in funding rounds over the last 12 months.
Last week's landmark €44m fundraising haul by the Dublin software firm Intercom brings to €220m the amount raised by the top eight Irish tech firms and startups over the last year.
This is more than double the €98.9m raised by the top eight Irish tech firms during the previous 12 months.
It comes as many Silicon Valley tech companies are seeing sharp falls in their valuations through a series of weak IPOs and fundraising 'down rounds'.
In the last 12 months, the cream of Ireland's private indigenous tech companies have seen an average investment of €27.5m per fundraising round, way up on the previous year's average of €12.4m.
It is also the first time that three Irish technology firms have raised over €100m between them in such a short period. The Irish entrepreneurs' charge has been led by Limerick-based waste management firm AMCS (€45m), Dublin-based chip design company Movidius (€38m) and Intercom (€44m). Other substantial Irish fundraising rounds have been closed by mobile marketing firm Swrve (€28m), mobile technology company Cubic Telecom (€18m), online branding firm Clavis Insight (€18.2m) and currency exchange startup CurrencyFair (€18m).
The fillip in funding comes as international indices show an acceleration in Irish commercial technology activity that is outpacing other countries.
A global analysis by UK-based Mooreland Partners shows that Ireland had the second highest number of tech company 'exits', or sales, per capita in 2015.
By population, Ireland was second only to Singapore and came ahead of Israel and the United States, which were third and fourth. The index was based on the number of exits rather than the cumulative value of those exits.
Speaking to the Sunday Independent after his company's €44m funding round, Intercom vice president Paul Adams said that the current cooling off in tech valuations has not affected the five-year-old firm's prospects in raising money from major Silicon Valley backers.
"Because our growth is so strong, there has been a lot of interest in the company," he said.
"The terms looked good. And the big thing for us is that it now means that we're fully funded and will not need to raise money again. It's tremendous for us because of the options it now gives us.
"We can be profitable next year if we want to or we can hire aggressively."
Adams said that Intercom's attractiveness has been in focusing on product development rather than sales and development.
"There are a bunch of other companies recently who have laid people off and have had bad news associated with them," he said. "We believe that this is partly because they invested a lot in sales and finance rather than product.
"We're quite rare in that context. We spend 85pc of our money on product development."
Intercom's co-founder and chief executive, Eoghan McCabe, said that the company has turned down five acquisition offers "so far".
"We're in this for the long haul," he said. "We're not going anywhere."
Business software still dominates tech investment in Ireland by number and by value. According to a Sunday Independent analysis of figures published by the Irish Venture Capital Association, 53 of the 125 individual investments into Irish technology firms in 2015 went to companies specialising in business software.
This dwarfed any other tech sector, with medical technology firms seeing 19 separate investments and financial tech companies realising nine individual fundraising rounds. Business software firms accounted for €128m of the €500m invested in the Irish technology sector last year, while medical technology firms closed fundraising rounds worth €75m.
In this time, some of Silicon Valley's biggest technology companies have seen their valuations plummet. Victims of 'down rounds' include Dropbox, Square and Snapchat.
"The fact that the market is cooling off means that it's probably a superb time to get into tech," said Brian Caulfield, chairman of the Irish Venture Capital Association and a partner at early stage investment firm Draper Esprit. "The reality is that good companies are going to continue to get funded."
Sunday Indo Business