Monday April 6, 2020

Fast forward to the future for revenue growth victors

Three years into leading the Deloitte Fast 50, David Shanahan has lost none of his enthusiasm for the tech sector’s most coveted awards, writes Jason Walsh

3rd November, 2019
David Shanahan, a tax partner at Deloitte and Fast 50 programme lead

Year after year, for two decades now, Deloitte has put out its call to the Irish tech sector. It never gets stale, though, thanks to the fast-moving landscape of technology.

David Shanahan, a tax partner at Deloitte and Fast 50 programme lead, said the Fast 50 was best known for its credibility: a recognition of the true value of Ireland’s indigenous tech sector.

“People like the awards because they’re objective,” he said.

Indeed, Deloitte’s Fast 50 is centred entirely on revenue growth.

“We look at revenue in one year, [then] the revenue four years later, and rank the company according to their growth percentage. It’s very straightforward and it’s very clear,” he said.

One result is that the awards are open to all comers — though they tend to skew toward start-ups, who find revenue growth easier to achieve than longstanding companies that already have large turnovers.

Still, all sizes are recognised, said Shanahan.

“There’s some huge companies in the room, but there are also small ones,” he said.

“For those that are quite small or at the early stage of their evolution, it’s a great way for us to provide them with the opportunity to network.”

A secondary result of all of this — perhaps less important, but arguably one of the keys to the success of the awards — is suspense.

“The tension builds thought the night, and there’s really a great atmosphere,” he said.

Local heroes

Although the Fast 50 is an international award with different ceremonies in different countries, it is perhaps particularly suited to Ireland — a country of scrappy entrepreneurs, said Shanahan.

“The fact is that in Ireland we’ve always been really successful in making our own businesses, and so the Fast 50 is nice because it recognises and celebrates the success of Irish indigenous entrepreneurialism,” he said.

What was perhaps a defect in the Irish economy at the foundation of the state — a low population and little traditional secondary and tertiary industry — has arguably contributed to a do-it-yourself ethos that is very much in sync with the modern world.

“It’s part of our nature: we’ve always been dogged, and fighters,” said Shanahan.

“More recently, since the 1990s and 2000s, there has been a tech focus [in Irish business in general], plus a realisation that they can run a business from Ireland that doesn’t need a local customer base.”

This is key to almost all Fast 50 success stories: they may be Irish businesses, but few are selling exclusively to the domestic market.

“The joy of technology is that you can get customers all over the world,” said Shanahan.

Of course, government policy and even the arrival of foreign-direct investment have also played roles, and with the technology sector there is something of a symbiotic relationship between the indigenous start-up scene and the 800-pound gorillas.

“The multinationals could well be customers of the winners, but they’re there [at the awards ceremony] to demonstrate their support, and also to network and [to] build relationships.”

The awards as a whole recognise the importance of technology to the Irish economy, but some awards, such as the Spotlight on Cybersecurity, zoom in on particular sectors that Deloitte has identified as key areas for growth.Won by Belfast’s Titan IC, a fabless chip designer, Spotlight on Cyber is very much a recognition that in 2019 cybersecurity is an area that no-one can afford to ignore.

The Spotlight on Fintech award, meanwhile, is sponsored by Silicon Valley Bank, a leading lender in the tech sector; the winner, TransferMate, will be brought to the US to explore investment opportunities.

Changing times

Although the nature of the awards is consistent — measuring revenue growth — some years throw up surprises, and 2019 was certainly one of those.

In fact, it threw up two very different surprises: a bevy of new faces, and the return of one very well known to attendees.

“What was particularly interesting [this year] was that in the top ten, we had eight first-time entrants,” he said.

This represents a change from recent history, where continued growth has seen the same faces pop up more than once.

“In recent years there had been a lot of the same companies,” he said.

Some have returned again, of course, but it becomes harder for companies to feature in the Fast 50 with every passing year as the required growth figures require ever move revenue.

“We had xSellco and eShopWorld world winning several times, and they [both] made it back in. The presence of the new ones, though, shows we’ve a stream of new companies that are starting to break through,” said Shanahan.

One new entrant, overall winner Electricity Exchange, is an interesting case in point because what it does — using digital technology to reduce the need for electricity generation — is very much au courant when it comes to 2019’s political debates.

On the other hand, the other surprise was the return of First Derivatives, whose continued appearance in the awards speaks to phenomenal, unicorn-like levels of ongoing growth.

“We look at [revenue] the base year, so in this case of 2015 and, the most recent year, here 2018,” said Shanahan.

“What you typically see is that companies shoot on to the scene, and then drop back down as they settle into business, but this year we had First Derivatives who were the first [ever] winner, 20 years ago.”

For Shanahan, such success should be recognised as nothing short of staggering.

“Think about the commitment required to come back after 20 years — even to be still around, frankly, but, as is the case with First Derivatives, to have made the list 17 years out of 20,” he said.

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