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Tuesday 18 August 2009

Irish Technology Exits 2000-2009

As part of the work for the Innovation Taskforce, I was interested to see a survey of all Irish technology related companies since the start of the decade.

I tweeted #itaskforce and asked whether anyone had seen one. Joe Drumgoole, a friend of long standing, was kind enough to share a list which he had put together, although his list is primarily ICT companies and excludes the life sciences. A few other people also kindly replied to my tweet with data for some specific companies.

The Irish Venture Capital Association have some excellent data on their web site on venture deals closed in Ireland, and update these on a quarterly basis since the start of 2008. Sadly however, they admitted to me this morning that the IVCA does not itself routinely collect exit data and valuations.

I have approached Enterprise Ireland to see whether they have comprehensive data, and are in discussions with them.

In the interim, I used Joe's data as a starting point and then did a web trawl myself. I also searched the CRO to find each company's start date, so that the age of the company at its exit could be found. My data and list are here as a .pdf file.




Please note that I have not included companies outside the Republic of Ireland (e.g. in Northern Ireland). Please also note that the exit valuations are in euro, not US dollars.

I included IPOs (chiefly UK AIM) as an exit event, although I admit that this is arguable since liquidity of the founders and investors may not always be achieved.

Please also note that some some companies have chosen not to disclose their exit valuation. In some cases I have been able to discover an "undisclosed" figure from other sources. But in some cases, I do not know the exit valuation, and have marked these accordingly. In working out an average exit valuation for any particular year, or for the entire period, I have normalised the "undisclosed" exits to the group average.

I fully admit my data may not be accurate. If you can supply any corrections, or additions, please tweet me @chrisjhorn. Also, I may get some additional data and/or corrections from Enterprise Ireland in due course..

Some top level statistics for you (if my maths and Excel are correct :-). In the period 2000-2009 my data shows there have been
  • 72 exits
  • with a total value of 2,175M euro
  • which gives an average exit value of about 30M euro
  • and an average age of a company when it exits, of 10 years
Some graphs for you:
PS - I also have a list of Venture Capital deals in the Irish Technology Sector, on a quarterly basis since 2008, here as a .pdf file. This is largely from the IVCA data, although not exclusively.

10 comments:

David Kirk said...

Excellent!!!!!

Is it also possible to get exit EV multiple?

chris horn @chrisjhorn said...

I wish.

IMHO there should be a routine collection of exit data by one or more agencies, with EV, #employees, revenue, profit, etc, etc.

I hope such data can begin to be accumulated in the future, and we may be able to reverse engineer it from the past...

Thanks David, wish I had more data...
Chris

fergusb said...

Hi Chris

We also did some analysis on investment activity a while back

See http://www.web2ireland.org/2009/04/24/irish-investment-activity-2008-short-analysis/

FWIW, i understand that the IVCA data is not very accurate - funds not disclosing investments, incorrect amounts, etc

If only we could get API access to CRO

Best Regards
Fergus

chris horn @chrisjhorn said...

Extremely useful Fergus, thank you very much indeed. I was unaware of your work.

I will correlate and update mine, and re-post if necessary in a couple of days.

Many thanks
Chris

Siobhan O Dwyer said...

Hi Chris,

It's good to see some baseline research being carried out, it's the only way to assess what has/has not worked in the past in order to make decisions about shaping future policy.

However the really interesting piece would be to know what happened next. In cases where companies received state investment of one sort or another, what was the return to the state's purse in terms of job creation/ tax revenue after the exit?

It would be a very valuable exercise to follow the money trail for the past 5 or 10 years to see what the outputs were from relevant projects that received state funding. I personally have worked on projects where ip was developed in Ireland and built up into a viable brand with a proven market only to lose it along with all associated jobs through overseas acquisition.

While on the topic of research, I have been following the itaskforce twitter stream with interest. The information sharing is very valuable but it struck me that while the momentum is there it might be timely to do some structured research.

A few well thought out questions put to smart economy innovators at various stages of development might solicit useful insights into success factors, key
barriers etc. It would put some shape on the many opinions that are emerging throughout the process. From a commercialisation perspective it would highlight gaps between what innovators themselves perceive to be
important and what successful models have shown to be important (I'm thinking of today's Irish Times opinion piece by Michael Hennigan where he cited Prof Bhide who said that US venture-capital based businesses have workforces with higher proportions of people who are "close to the user").

Just as an aside I took a look at the IVCA pulse report for the first half of the year. Only 3 of the 38 companies whose details were disclosed were categorised as Environmental. Seems astonishing if correct. Interesting market stats available from Carbon Trust UK showing the vast size of the low-carbon goods and services market. Also a report showing that US VC investment in cleantech is way ahead of the rest of the world.

chris horn @chrisjhorn said...

A thoughtful comment, Siobhan.

As I have started digging deeper and deeper, I have been disappointed that - as far as I know to date - no state agency has been routinely collecting data on the innovation sector, start-ups, licenses, exits, revenues, VC backing, angel backing etc etc.

If Ireland is going to have a "smart economy" then you would think that some civil servant somewhere might have been asked to collect data on it. Maybe there is, but I haven't found him/her yet.

One concern I have is the proliferation of views and opinions, but the apparent lack of data for the Irish situation to back any of these up -- "show me the data"!

And as regards the clean tech and green sector, I had a very interesting hour with @ReEnPower yesterday, and believe he will make a formal submission to the task force for the Sept 18th deadline..

So, I agree with you that there is an opportunity to do some formal research. Anything I have done so far is simply to trawl the net, taking inputs also from Joe and the IVCA and now also today Fergus, and try and assemble the picture based on accurate data.

So, I think you can predict at least one of the recommendations that the Innovation Taskforce might credibly make: "collect the data and keep it current" :-)

best
Chris

Brian O'Donovan said...

This sounds like interesting data you are presenting here (sorry for not commenting sooner I was off-line for the last two weeks).

Siobhan's says:
>It would be a very valuable exercise
>to follow the money trail for the
>past 5 or 10 years to see what the
>outputs were from relevant projects
>that received state funding.

I agree that we need more fact based research instead of opinions. However, since the innovation taskforce is looking at building long-term value, I think that we ought to leave at least 10 years between making the investment and judging whether or not it was a success.

Chris Says:
>So, I think you can predict at least
>one of the recommendations that the
>Innovation Taskforce might credibly
>make: "collect the data and keep it
>current" :-)
If we are going to collect data we ought to be careful to ensure that we are tracking the correct metrics.

For many years the IDA was focussed on the metric - "# of jobs created". This was a useful way to measure the ROI of IDA grants in the early years when the IDA was attracting multinationals to set up manufacturing operations in Ireland. At this time it was helpful for the IDA to have such a clear metric.

When the celtic tiger boom was at its peak and we needed massive immigration to fill the available job vacancies, the IDA had to adopt different priorities. Nevertheless, most newspaper reports of IDA investment decisions always included "# of jobs created" in their headline. It would have been helpful if could have invented a replacement simple metric that captured our revised priorities and could still be understood by the public.

Siobhan O Dwyer said...

Brian,

You are raising one of the most difficult questions of all. But it is only difficult if we are not clear about what we want to achieve. So to take a few simple examples:

Ireland is the most highly educated workforce in europe - metric: level of education within our population
Ireland is the world's innovation hot-house: metric - no. of patents
Ireland is the world's leading cleantech economy: metric - the technology solutions that we export

Here's another thought. Perhaps the answer is in the question. Forget "smart" economy ( a term I personally don't like very much) and go back to "knowledge economy"

The single most important driver of innovation in business is knowledge. Of new research, of emerging trends, of new shifts in customer demand, of what the competition is doing. I've noticed a lot of commentary about trying to bring this knowledge to Ireland. Perhaps what the innovation taskforce needs to do is bring ireland to the knowledge. Structured open access for all businesses across all sectors to emerging research and the worlds brightest minds. Surely in a technology driven age we can achieve this?

Also I think that running parallel to a strategy that catalyses high potential start-ups we must equip our established Irish businesses with the knowledge they need to be innovators.

How do you measure this? Perhaps you can't.

Brian O'Donovan said...

Siobhan

I don't think that we should allow the fact that measurement is difficult as an excuse not to try to measure the economic impact of our investments.

I have posted some thought on my own blog on how measurement mighth be achieved.

Brian

Gerard Brandon said...

"If Ireland is going to have a "smart economy" then you would think that some civil servant somewhere might have been asked to collect data on it. Maybe there is, but I haven't found him/her yet."

That would of course mean that you need to find a "Smart Civil Servant" who is good with numbers. Don't look in the Finance Ministry then.