Replicating the success of Stripe, hereThursday 23 January 2014 20.00 By Will Goodbody
By Will Goodbody, Science and Technology Correspondent
Last year was a pretty strong one for investment in Irish technology start-ups. Currency Fair ($2.5m), Trustev($3m), RAPT Touch (€4m), FeedHenry (€7m), Logentries (€7.3m) were among a whole host of growing Irish tech firms to secure seed and venture capital to help fuel them to the next stage. It was all indicative of a growing belief from abroad in small Irish firms with big disruptive ideas. A recognition that this country’s is gradually coming of age, when it comes to encouraging, facilitating, incubating and growing innovative new tech ventures.
Amid reports that more foreign tech funds are eyeing up the opportunities in Ireland, it appears the trend is continuing into this year. Yesterday, the Irish tech scene was wowed by the announcement by Irish tech startup, Intercom.io, that it had raised a substantial $23m in Series B investment funding from two US venture capital funds with a track record for picking winners.
Thought to be the largest fundraising by an indigenous software company, it catapulted the two year old customer relationship software firm into the big league, giving it a valuation thought to be in the region of $100m. The business has an interesting strategy, having decided early on that to maximise its growth it was best for it to put the main leadership team in San Francisco, and leave the engineering and design team here – the opposite approach to most other tech firms with global ambitions.
Intercom’s incredible success, however, was to some extent overshadowed this morning, when tech watchers here woke to the news that online payment firm Stripe had closed a Series C fundraising round, worth an eye-watering $80m. As a result, the four year old firm is now estimated to be worth a staggering $1.75bn, more than three times what it was valued at in 2012. It’s a remarkable achievement by brothers John(23) and Patrick (25) Collison from Limerick, who have constructed a billion dollar company from a small peripheral idea they worked on when they were in college.
But despite its Gaelic roots, unfortunately Stripe currently has next to no presence in Ireland, aside from its product. Its headquarters are in San Francisco, along with the bulk of its 80+ staff. The Collison brothers were both living in the US when they moved to the west coast to start the business. They moved there for a whole host of reasons that made complete sense at the time, and continue to today. There they found the creative support, the financial backing, the engineering know-how and the can-do attitude it takes to build a winning company. The reality is that had they tried four years ago to do in Ireland what they have done in the US, it is unlikely they would have achieved such extraordinary success as they have in such a short period.
However, it is perhaps ironic that Stripe’s announcement came on the day that the government here published the Entrepreneurship Forum Report (in a technology incubation hub). Among the report’s many recommendations are mandatory training in commercialisation for all third-level science, technology, engineering and maths students; changes to the law to support employee stock option programmes; a mentoring network driven by entrepreneurs; tax incentives for investment in enterpris and a flat tax of 15-20% on all types of income.
I’m not saying that had such measures been in place four or more years ago, we would now be talking about Stripe as an indigenous Irish based tech success. That’s too simplistic. But if we are to develop similar success stories here in the future, it seems the Irish entrepreneurial eco-system will have to change and evolve to suit the needs of our young entrepreneurs, developers and those that finance them.
So let’s hope the report doesn’t gather dust on a shelf somewhere.