“We have seen many more FinTech startups because there are great opportunities here and also great examples of companies that are doing extremely well here.”
In this instalment of Ireland’s FinTech Future blog series, we sit down with the Head of Fintech at Enterprise Ireland (EI) – Giles O’Neill to find out about how they are helping nurture Irish Fintech companies to grow and scale internationally.
For those unfamiliar with Enterprise Ireland (EI), can you briefly tell us about the organisation and your role within it?
The easiest way to describe EI is that we have a responsibility to help Irish companies start and then to scale. It’s taken us a long time to refine that because we touch many aspects of Ireland and the wider ecosystem and particularly around this subject matter of FinTech. But in terms of what we do, we invest in startup companies and for those companies that are already established, we try to scale them internationally. We are measured on our international exports out of Ireland and job creation within Ireland.
I head up the FinTech team where we have responsibility for approximately 200 Irish FinTech companies
A little bit later we will talk about some of the specific things that EI are doing for the FinTech sector. But in more broad and general terms, what have you observed happening within FinTech in Ireland over the course of the last couple of years and has there been a significant uptick in FinTech startup companies?
Well, I think you’ve got to look back before you look forward. Ireland has had really significant Irish owned FinTech companies. Going back 20 or 30 years, long before the term FinTech was even developed.
So we have been working with FinTech companies in this space for decades but I think it’s recently gone right up the scale in terms of importance.
In the last few years, we have certainly seen growth in the FinTech sector. We invest in about 200 startups on an annual basis and of that it’s close to about 10% on the FinTech side.
That FinTech investment has increased year on year over the last 4 or 5 years from low single digits initially.
One of the things that we ran this year for the first time was a competitive start fund specifically for FinTech. This is a competitive fund that we run on a sector basis infrequently and there was a great response to this first FinTech specific one.
So to answer your question, yes we have seen many more FinTech startups because there are great opportunities here and there are also great examples that are doing extremely well here.
Can you tell us more about the FinTech competitive start program and the quality of companies that emerged from that?
The Fintech competitive start fund allows us to invest up to €500,000 in ten companies. We were well oversubscribed in terms of applicants but out of that we selected ten and invested in ten.
This year, though, we did something slightly different, instead of investing and just letting people get on with it, we said we needed to do a little bit more.
So in the spirit of IFS2020 we did this in conjunction with the FPAI, Ulster Bank and Dogpatch Labs. Through the FPAI and through their membership like Citi bank etc., and we ran a series of masterclasses over the four months of the program.
The purpose was to give these newly funded startups the chance to sit down with the innovation teams within banks, to sit down with people who knew how to sell to banks and to just share their experience of honing a value proposition.
In addition to that of course, they were all given space in DogPatch which allowed them to use that community. So it was a much more supportive program than just giving them funding.
In terms of results, I can’t tell you the exact numbers but several of them have secured additional rounds of investment which is a great result, because remember this was only over the period of a few months and these are very very early stage companies.
Have EI any further plans for specifically helping the FinTech sector through 2017 and beyond?
Just last month at our end of year board meeting we signed off on running the FinTech specific competitive start fund again for 2017. So you know, that is great news because there isn’t a bottomless pit of money and there is competition for what gets funded. It’s a tribute to last year’s success and to the FinTech space that it’s getting the go-ahead again this year.
Another thing that we are going to be doing more of is on a regional basis. If you look at the entire ecosystem there is a really good spread of FinTech companies all over Ireland. So we are going to do more on a regional basis in partnership with other organisations and those plans are already in place.
We will also do more on the internationalisation side and market diversification. We are really going to be supporting our FinTech client companies to expand and grow overseas on every continent, and much of that will be supported at the very highest level of Government. And you know, that is something that gets underestimated. Having a Government Minister standing beside you as an Irish FinTech company and getting the access which that provides, can be really really transformational.
Another initiative that EI is involved with is TechLife Ireland. Can you tell us about your involvement in that and what it is trying to achieve, or even has achieved so far?
TechLife Ireland is a joint IDA and EI initiative and it’s about positioning Ireland as a great place to come and get a job and to live and work. You know Ireland has a vibrant tech community, it is a fantastic place to live, it is a fantastic place to bring up children and a fantastic place to do a lot of different things.
One of the things that we will need is international people working in this space to help our companies achieve the goals they want to achieve. So whether that is language, technological capability or connections, we will need more international people.
One of the things that’s in our action plan for next year is to build more case studies and to get those up on the website to give it more colour. So we will be sending out camera crews to various companies and doing interviews to find out what it’s like living and working in Ireland.
Dublin is a great city and it has a great brand and it’s just about helping to promote that as much as we can.
One of the most dramatic political developments of 2016 was obviously the decision by the UK to leave the EU. What effect, if any, did Brexit have on EI’s strategy towards financial services and more particularly FinTech?
We had prepared for this and had scenario planned quite seriously even though we didn’t expect it. So we had a plan in place and we published it almost immediately after the vote in terms of the wider EI supports.
On the FinTech side, one of the first things we did was that we spoke with all our clients on a one to one basis, starting with those that were particularly exposed to really get a good understanding of those specific issues that they believed they were facing and to respond accordingly as best we could.
This whole Brexit thing is still developing. Various initiatives have been started already. We have a Brexit department here in EI, there is a Brexit department in the office of the Taoiseach, there is an additional group working on IFS2020 which is feeding into the Taoiseach’s group.
The things that I keep saying to my team is that we really have to stay close to the clients. The main reason for that is that we are still not quite sure what is going to happen. We have to plan for just about every eventuality but it’s very difficult when you don’t know what is going to happen. So things like passporting etc…….. we have to plan the various different options around that and keep close to our clients.
That said, we are certainly not totally British centric and a lot of the client companies that we have have a huge international focus beyond the UK so we need to grow in those markets and our client companies are up for that and we will be behind them.
Do you feel that Brexit is an opportunity for Dublin in terms of FinTech companies relocating or setting up here and how best can we make the most of that potential opportunity?
I know it’s the easy answer but it really is a case that it’s too early to tell. It could be a risk and it could be an opportunity. What I do know is that most of our client companies are pretty upbeat and will see opportunities.
As I said earlier, they keep telling us that they have huge fish to catch in the US, Asia PAC and other parts of the world and that is where our focus is going to be. It’s not that they are going to stop doing business in the UK, they have big customers there, but they will just manage that.
The second European Financial Forum took place in Dublin Castle. What do you see as the potential benefits coming out events like this and what part does EI play?
Well the IDA is the lead on this but what we do is we promote this event internationally through our 32 offices and we use it as a reason to come to Ireland.
So last year we had a number of international guests that we brought over to Dublin for the event who also met a lot of our client companies.
So for example, one of our team, in say, the Nordic countries, has a relationship with some of the financial institutions there might use it as a reason to invite them down and then build an itinerary around that to meet some of FinTechs here in Ireland.
As part of your role in EI, you must come into contact with a lot of indigenous Irish FinTech startups. Are there any in particular that you are especially excited about in terms of their potential to grow internationally and become a real success story?
I don’t really want to mention specific names as you invariably leave people out by accident. But we are in the really enviable position of having a really rich flavour across all the various levels. We have some fantastic international companies, world-class companies on the FinTech scene that are operating in every country that you can name.
Then we have a number that is developing, doing incredible business and have huge ambition… the likes of Fineos, Fenergo, TaxBack, Fexco…. These guys are really serious international players and are doing extremely well.
Then there is a large number of startups which maybe are not household names yet, but at the risk of avoiding the question, what I’m most excited about is the variety of FinTech companies that we have.
We have companies that are in P2P, companies that are tackling the insurance market head on and coming up with really creative technologies.
We have some really exciting companies in RegTech and I really believe that these guys are going to knock the socks off the competition and do really really well internationally because they have something that is quite unique and we will invest in them.
A lot is always expected of the Government and the state-sponsored bodies, in terms of promoting and helping individual industries, but what do you feel we as individuals and as companies within the private sector should and could be doing to ensure Dublin continues to grow as a FinTech hub?
I have had first-hand experience with this sort of looking up to Government for help. But in the FinTech side, there is an incredible willingness, ability and energy to really just get on and do things and to make things happen.
There is also a willingness and an openness within the community to allow that to happen and you’ve got all these different structures that people plug into… but what we hardly ever get is that feeling of ‘what is EI doing about this?’
They see us as a partner within the sector from an investment perspective and of course, we have a role to play in terms of the scaling and the internationalisation of the business but outside of that, they are just moving fast.
A lot of these guys don’t have a minute to think ‘what can I get out of EI now?’… they have just moved on… things just move on and everything is so fast.
In terms of helping the ecosystem, I think we are not doing badly, but it probably needs more structure. You know we have organisations like the FPAI and FinTech Ireland, you’ve got the NDRC and the FinTech pre-accelerator, the Accenture labs, Mastercard, the Deloitte blockchain lab and you’ve got Dogpatch and the FinTech fund.
So there is already so much there, but connecting it all up is still a challenge and making sure we are not stepping on each other’s toes and making sure everyone knows what is happening.
If there was a silver bullet to really make that hum, we would have it but it’s something that myself and the team and the wider IFS group really want to get right this year.
Finally, looking to the future, what would you say to entrepreneurs or organisations considering moving or founding a Fintech company to/in Ireland. What does Ireland have to offer as a place to launch and/or operate a business and grow in international markets?
Businesses move to Ireland for a myriad of reasons to start businesses, but once they are here and are established, they really do see the benefit of being in a very versatile and flexible country as part of the EU which has hugely strong and long-standing connections into the UK, the US and further afield.
We know this because we do quite a bit of research on his topic as you might expect.
And you know we have incredible capacity, both from a state perspective but also from a company to company perspective to get behind companies. One of the things that continues to amaze me is how willing people are to give up their time. For instance, with the CSF (Competitive Startup Fund) that we ran this year, we had existing startup companies coming in and spending huge amounts of their valuable time with these new startups and just sharing their experiences. You know as an international company who employ international people, I have people come up to me regularly and they cannot believe the openness of Ireland and the Irish as a place to live and work and do business… there are not many other nations that can match that. That’s the secret sauce if you like.
For instance, with the CSF that we ran this year, we had existing startup companies coming in and spending huge amounts of their valuable time with these new startups and just sharing their experiences.
You know as an international company who employ international people, I have people come up to me regularly and they cannot believe the openness of Ireland and the Irish as a place to live and work and do business… there are not many other nations that can match that. That’s the secret sauce if you like.
That’s the secret sauce if you like.