The conference group 0100 ran a heavily attended Private Equity and Venture Capitalist conference in the Hilton, Charlemont Place, Dublin last Thursday April 12. 

After a keynote introduction from Sarah-Jane Larkin – the Head of the Irish Venture Capital Association – the conference split into three streams, each hosted by a panel.

Attendees numbered around 300, with venture capital professionals and companies from 20 countries represented. Over €500 billion was under management by the combined attendees in the room. One of the larger funds attending and speaking had over €220 billion under management. 

The venture capitalist sector in Ireland is especially buoyant, with over €1 billion in funding raised by Irish start-ups in 2017. The 2015 number was €522 million, which equates to massive growth over the past two years.

Fintech was a particular focus of many, with the panel bringing some interesting insights into the challenges faced by fintech start-ups. Financial organisations are now taking a ‘semi proactive’ approach to conversing with fintech start-ups, with most having some form of innovation team to proactively go to market to look for solutions.

Many financial institutions have re-positioned their respective procurement departments, which had previously been an excellent place for many start-ups to come to die. Despite the apparent willingness of financial intuitions to engage with start-ups, one of the major issues still faced by start-ups is the inordinately long sales cycle.

The panel spoke of how their clients experience a 18-24 month sales cycle, with one venture capitalist firm going so far as to setup their own Proof of Concept lap, where they showcase new fintech solutions in an effort to accelerate the sales timeline.

One of the key areas of investment for banks right now is mobile solutions, with mobile app transactions outpacing web transactions for the first time. Up to 77% of personal loan business is now conducted via mobile apps which is a huge seed change for the traditional banks.

There is no doubt that the emergence of a crop of online only banks (e.g. Revolut) is encouraging the existing banks to increase their pace of adoption. It remains to be seen if they can oil the wheels of their bureaucratic structures quickly enough.

“Cryptocurrencies are now where the internet was in 1992” was one of the opening statements of the crypto currency and blockchain seminar. The crypto asset class has suffered in recent months, losing up to 65% in total market value. This, to many, was an overdue correction.

The fact remains that in January 2017 the total value of all crypto currencies was $20 billion. Today, even after such a significant correction, the market cap is $260 billion. The panel compared the ‘clunky-ness’ of exchanging crypto assets and the relative immaturity of blockchain with internet dial up in the early ‘90’s.

There is a significant emergence of companies developing technology to wrap around crypto currencies. ‘There are new Googles and Amazons in the making right now’ according to the panel, which was strongly represented by venture capitalist funds who are highly crypto and blockchain focused.

The topic of Bitcoin being used for illegal transactions was debated, with the panel noting that it is possibly the worst currency to use for illegal transactions.  All transactions are traceable by anyone and are held in the blockchain forever.

The panel discussed what they looked for in a crypto currency or blockchain based start-up.  Old business rules apply in essence, with the quality of the team and compliance the headline areas where venture capitalist’s look before progressing to any meaningful discussion regarding funding. 

One of the most interesting topics debated was Ripple, and it’s potential to replace SWIFT transaction processing for the banks.  There is no doubt that the next few years will be highly disruptive, keep a watchful eye open for the new Google’s.

This is the second year running that Dublin has hosted such an event. Representatives of the Government were in attendance as well as a significant Enterprise Ireland presence.

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