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Úna Harty takes a look at Ireland’s start-up ecosystem and finds optimistic signs of resilience amid macroeconomic challenges.
Recently, KPMG published a report outlining the global decline in VC investment in the first six months of 2023. This was due to rising interest rates, high inflation and geopolitical issues such as the war in Ukraine.
VC funding is declining for its sixth consecutive quarter globally, indicating an undeniable slowdown.
Despite this, Irish tech has attracted record-breaking investment for the first half of 2023, going against aforementioned global trends. And more than 80pc of the total VC investment in Ireland comes from global investors.
It has also been widely reported that Ireland is experiencing its highest ever rate of employment since records began in 1998. About 74pc of people aged 15 to 64 are employed, a steady increase from last year.
The Irish jobs market does not seem to be reflecting the wider global climate with reports of Irish employers still experiencing labour shortages last month.
However, tech giants are scaling back with mass layoffs at companies like Meta, Microsoft, Amazon and Accenture.
EU agency Eurofound reported in July that Ireland has been the most affected within the EU when it comes to tech layoffs over the past three years. This is down to the fact that these companies’ European headquarters tend to be based in Ireland.
Strong indigenous start-up ecosystem
Despite all this, the start-up market, which usually feels the pre-eminent effects of an economic slowdown, is propelling in the opposite direction. Irish start-ups are relishing in continued confidence from their investors by expanding product development divisions and growing their headcount at a steady rate.
“While we have seen some prominent layoffs in large companies, in the smaller sector, start-up companies are actively recruiting to drive their ambitious growth plans”, says Anne-Marie Turley, manager for entrepreneurship and HPSU operations with Enterprise Ireland.
She believes that the outlook for Irish start-ups for the latter half of 2023 is strong. She says, “the number of enquiries, prospects and investments are all on par with 2022”.
“The start-up ecosystem in Ireland is ensuring that talented innovators, with global ambition, continue to emerge.” Turley attributes support like Enterprise Ireland’s Pre-Seed Start Fund to enabling this continuing momentum, indicating that “there is no evidence of slowdown in the EI investment pipeline”.
Signs of growth
On the ground, Irish start-ups at all funding stages are excelling in people growth.
Four-Day Week Global has increased their (albeit small) headcount by nearly 100pc in the past six months.
“This has been to fill capability gaps in order to help us provide the offerings that the market is anticipating and needing,” said Dale Whelehan, the company’s CEO. He is confident that their products across foundation courses, pilot programmes and consulting will meet organisations’ appetites for a unique HR offering.
He attributes Ireland’s strong start-up environment to the breadth of innovation constantly evolving across the country, allowing start-ups to continuously learn from each other in this ecosystem.
“Ireland is an exciting place to have a start-up because so much entrepreneurship is happening across the island. We see so much innovation in the technology space and food space and hopefully now in the future-of-work space.”
Eoin Bara, CEO of Tipple, a solution for selling alcohol internationally, noticed that VCs are being “more cautious”. He reflected on the “cheque sizes [being] smaller and the rounds [being] longer”.
Despite this, he’s looking to grow his team to 13, hiring for one role at the moment and more to be posted in the near future. He feels confident that, contrary to the global investment slowdown, his funders are confident in Tipple’s future and plans for growth.
Bara believes that “a lot of companies with strong fundamentals, such as product, team and projected cash flow, will always find funding”.
Paul Moore, marketing manager at Valid8me agrees that, “Ireland is a great place to be a start-up or a scale-up as the environment is one that fosters growth and encourages innovation.”
Valid8me offers a solution for organisations to streamline their onboarding services for clients and counterparties. They’ve already hired 15 people in 2023, with further plans to grow in the pipeline. Despite admitting to challenging economic conditions, they still see areas for growth, with a planned expansion into the UK market set for next year.
By Úna Harty
Úna Harty is a journalist in the beginning stages of her career. She has a background in science and business.
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