Facing a fast-changing future with confidence

The forthcoming Deloitte Technology Fast 50 awards demonstrate the strong role tech start-ups and scale-ups are playing in Ireland despite ongoing economic uncertainty

David Shanahan, head of Deloitte Private Ireland; Jenny Melia, executive director, Enterprise Ireland; Andrea Reynolds, chief executive and founder, Swoop and James Toomey, lead partner, Deloitte Technology Fast 50 Ireland

The last few years have painted a complicated economic picture. As emergency state support for businesses faced with the pandemic came to an end, headwinds kicked in including inflation and geopolitical uncertainty. At the same time, the multinational technology sector began a layoff spree, shedding excess staff in hopes of giving investors confidence.

However, the long-expected global recession has failed to appear, and central bank strategies for curbing inflation appear to be working.

Still, this is the complex environment entrepreneurs now find themselves operating in.

James Toomey, a partner at Deloitte who has taken over managing Ireland’s Deloitte Technology Fast 50 awards, said that the macro trends are in some ways having a positive impact on the domestic technology sector, in particular easing the skills shortage with strong talent getting released back into the market from the multinationals.

“Historically, big tech has soaked up all the talent. Now we are starting to see start-ups and scale-ups being able to access that talent,” he said.

The Deloitte Technology Fast 50, which ranks the 50 fastest-growing technology companies based on revenue growth over the last four years, is always an interesting event in the tech calendar as it gives a unique and objective view of this important sector of the economy. The programme provides Irish tech companies with a benchmark to measure their success which is critical as they scale.

Of course, when it comes to attracting investment in the tech sector, Ireland is not in the same league as Silicon Valley. Nevertheless, the country does enjoy a more buoyant scene than may be expected.

“No-one can compete with the US from a scale perspective, but we punch well above our weight. We have a thriving tech community and produce technology businesses that compete on a global scale, many of which have come through the Fast 50 programme. Ireland also had one of the fastest growing GDPs in Europe last year, with technology playing a key role in this growth,” Toomey said.

This growth and economic strength have been noticed abroad, with investors looking to Ireland’s businesses with interest.

“A lot of private equity from Britain is focussing on Ireland at the moment, given the relative strength of our economy versus theirs, and the quality of the technology businesses this country produces,” he said.

Ironically, one of the key reasons Ireland performs so well in the technology sector is because it is home to a small domestic market. As a result, while a software business in, for example; Britain can grow to a significant size by servicing the national market, in Ireland such a business is limited unless it internationalises.

“There’s a real trend for Irish business to internationalise early, whether to Europe, the US or further afield. This gives them a competitive advantage in comparison to their global peers,” Toomey said.

Investment alone is not the sole reason Ireland performs well, however.

Toomey noted several other factors, including a significant amount of government support, including from Scale Ireland and Enterprise Ireland, a large number of STEM graduates, and the fact that the multinationals have built up a strong ecosystem.

“We see a lot of Entrepreneurs coming from varied backgrounds, and bringing fresh ideas into the tech ecosystem, which is a credit to the focus the Irish government has had on STEM education in recent years,” he said.

Naturally, the Fast 50 reflects changing interests, giving an insight into areas of business that have prospered as technology has evolved.

“There has been a massive shift toward AI and cloud computing with businesses providing services such as data analytics, cybersecurity and managed services growing alongside these growth areas. Those that perform well in the Fast 50 typically emulate market trends and the sub-sectors that are taking on the most investment, so we are really looking forward to meeting this year’s winners,” he said.

Toomey, who has a background in technology including a masters in electronic engineering from UCD, said he is excited to be taking the reins at the Fast 50, which has been stewarded by Deloitte’s David Shanahan, now head of Deloitte Private, for the last number of years.

“I think it’s a brilliant platform. It gives Irish companies a real black and white metric to gauge how the indigenous tech community is performing because it’s based on numbers, not opinions. In addition, it is great to see that there's a real sense of community for Fast 50 winners with lots of collaboration and networking between entrants,” he said. Given the economic environment, it is certainly an interesting time to be taking over. After all, the era of companies being able to grow by accessing ‘free money’ is well and truly over.

There are still a lot of avenues for both funding and growth, however, from venture capital, private equity and acquisitions.

“Some do grow inorganically by making acquisitions. Indeed, highly-acquisitive companies are a big part of the rapidly scaling tech sector in Ireland. This ability to scale through bolt-on acquisition is seen as highly attractive to investors,” said Toomey. In addition, the private equity community in Ireland has matured over the last five years, he said, both in terms of domestic investment, as well as from Britain, the US and further afield.

“For those private equity players, what they are looking for are companies with a defensible growth plan, recurring revenues, sticky blue-chip customers, robust scalable technologies and high barriers to entry.

“As a result, while this changed landscape poses a challenge to entrepreneurs, the continued availability of investment capital could point toward the success of even more sustainable businesses,” Toomey said. “If you go back a few years, investors saw businesses that were scaling rapidly but burning high levels of cash as attractive investments.

“That’s become a lot rarer in today’s market, as investors reduce downside risk by focusing on businesses with positive cash dynamics or a very clear route to profitability. Cash burn needs to be funded, which is expensive and riskier in today’s environment.”

Andrea Reynolds, chief executive and founder, Swoop

Big numbers in funding

Seeing is believing, said Andrea Reynolds, chief executive and founder of Swoop, which provides funding and savings solutions to businesses. Specifically, she means when it comes to women leading tech businesses.

“I think women are becoming more prevalent in the tech industry, particularly fintech. You see someone like you doing it, being in the Fast 50, and I think it normalises it. That and, also, we’re good at helping each other out and building a community along the way,” she said.

Reynolds and Swoop are certainly a case in point: Swoop placed fourth in 2022’s Fast 50, while Reynolds was awarded the Advocate for Women in Technology Award.

For Reynolds, the key to getting more women to become founders is igniting passion.

“The research shows women start businesses because of a passion. There are a lot in climate tech and sustainability, for example. With males, usually it’s that they see an opportunity,” she said.

Beyond founders, perhaps more women taking tech careers in general would also be helpful, though, as it could help with the skills shortage. Asked what are the biggest challenges in the Irish technology sector today, Reynolds said that recruitment remained difficult.

“Getting programmers is like getting hen’s teeth. That’s been a real struggle over the last five years,” she said.

For Swoop itself, the Fast 50 has proved a success, and proved Swoop’s success.

“I would say two things. One, it’s great to get the recognition for putting in the hard work as a fast-growing start-up. Secondly, it’s great to get that recognition, not just in Ireland but also globally. We’re able to show growth and it’s independently verified,” she said.

Nick Keegan, chief executive and co-founder, Mail Metrics

On the fast track to the metrics that matter

15th, 14th, 2nd: if numbers matter then Mail Metrics has the right one. In 2022, having previously ranked 15th and 14th in the Deloitte Fast 50, the list of Ireland’s 50 fastest growing technology companies, Mail Metrics shot to number two.

Nick Keegan, Mail Metrics’ chief executive and co-founder was, understandably, thrilled.

“Last year was our third consecutive year in the Fast 50. We came 15th, 14th, and then second, which first, of all, is a great validation that helps potential customers to get a sense that they are working with a company that is really growing. But, it is also validation and a reward for the people who work here,” he said.

Key to the Fast 50 is that it is not just another ‘gong’ handed out on the basis of unclear criteria. Instead, the Fast 50 measures concrete revenue growth. This is why, for both customers and staff, the award really matters, Keegan said.

“It's an objective and factual award. It's a very clear metric and straightforward to calculate, so you know there’s real substance to it. Not only is it hard to get into the Fast50, but it gets harder to stay in year after year as your base year revenue grows,” he said.

Providing highly regulated industries with a Critical Customer Communications software platform, Mail Metrics is firmly in the business-to-business (B2B) space. Therefore, recognition that the company is growing only helps drive confidence.

This is crucial for Mail Metrics, as it is in the process of international expansion, and is doing so through acquisition.

“For the first eight years we were focussed on domestic growth. In 2021 we made our first two acquisitions,” he said.

“We came second last year, but we’re projecting to double revenues again this year,” he said.

“We have strong organic growth, but supplementing this with strategic acquisitions has really enabled us to scale at pace. Growth through acquisition allows us to acquire new customers and scale into new jurisdictions faster than we could organically.”

Deloitte Technology Fast 50 Awards: Calling Ireland’s Fastest Growing Technology Companies

Now in its 24th year, the Deloitte Technology Fast 50 Awards recognise the fastest growing technology companies across the island of Ireland. The programme ranks technology companies based on revenue growth over the last four years.

Deloitte 2023 Additional Award Categories

The awards programme will include several award categories that companies can enter in addition to the overall ranking:

1. Growing New Technology Award in association with Google

This award will be presented to a company that has created or introduced a new or innovative product or service to international markets that has helped grow their business over the last four years..

2. Impact Award in association with Meta

This award is for a company that has made a significant impact within the current year.

3. Advocate for Women in Technology Award in association with NetSuite

This award will be given to an individual who has demonstrated through their actions that they are an advocate for increasing participation by and promotion of women in the technology sector.

4. Scale Up Award in association with Scale Ireland

This award is for a company that has demonstrated an impressive ability to scale up or expand overseas over the last four years.

5. Financial Services Innovation Award in association with Financial Services Ireland

This award will recognise a company with an innovative product or service that is having a disruptive impact within the financial services industry.

Rising Star Award in association with Enterprise Ireland

This separate award will recognise a company who demonstrates a promising growth trajectory and the potential for inclusion in the Fast 50 rankings in years to come. Companies being considered for this award have operating revenues accounting for a minimum of 2 years and less than 4 years.

To enter the Fast 50 Awards, companies must meet the criteria listed on the website where applications can be submitted. Applications close on Friday, October 6 at 5pm.

Full details can be found at fast50.ie