Ranking the growth of technology companies by revenue may seem a bit redundant in these times of dotcom realism, but the Deloitte Fast 50 event seeks to find the most consistent measure of success amongst the fastest growing-technology companies in the State and Northern Ireland.
Revenue growth is deemed to be just such a measure and as David O’Flanagan (pictured), partner at Deloitte explains, the most readily available. “Companies are not always amenable to disclosing their profitability figures so we look at revenue because it’s definable,” says O’Flanagan.
Although definable, revenue is very much a measure of short-term activity. As O’Flanagan points out, it doesn’t take into account the money that an organisation could be ploughing back into the business that might indicate longer-term investment.
The Fast 50 is now in its fourth year having originally started out in California in the mid-Nineties when it was a reflection of the boom times in technology. ‘We wanted to see how the model worked in Europe,” says O’Flanagan, “so Deloitte in the UK started the event and soon we had rolled it out across Europe and it is now held in Africa and the Middle East.”
The Irish Fast 50 event culminated in an awards ceremony that took place in the Guinness Storehouse, St James’s Gate, Dublin on 16 October. The 50 winners were selected from 200 entrants comprising of previous Fast 50 winners, direct entries in response to an advertising campaign that started in August.
Despite the challenging times, this year’s event saw the average turnover growth increasing on last year by 20pc to 269pc. Despite the improved performance the consistency of performance of many companies continues to fluctuate. Whilst 13 companies have appeared in all four Fast 50s, placings of these companies is changeable with only one company keeping a top 10 place, last year’s winner, eTel, the central European telecoms provider. And just three companies making the top 20 spot – eTel, Connect Global Solution and Electric Paper.
But if proof of success over the adverse economic climate were needed then this year’s winner is surely testament to that. Xsil achieved a staggering 3,000pc growth in three years to claim first place. The Dublin-based company provides laser micro-matching systems for high-volume manufacturing in the semiconductor, optoelectronic and biomedical sectors. Employing 120 people, including 25 PhDs, the company achieved record sales of €35m this year.
In second place, was Web Reservations International, the leading global provider of online reservations technology for the budget, independent and youth travel market that achieved a growth rate of 1,436pc. In third place and last year’s winner was eTel Group, Central Europe’s leading alternative corporate telecommunications service provider, which had an aggregate revenue growth of 1,019pc.
O’Flanagan also talks optimistically about the north-south representation in the Fast 50 event. “The programme has genuine cross-border appeal that we are keen to encourage because it gives a significant additional dimension.” The first year of the event saw a northern company, First Derivatives, win and it was also the year that a record number of Northern Irish companies entered the event – 20. Although only 15 businesses from the North made the final list this year, this still represents a good turn out from an under-funded sector of the country.
O’Flanagan sees a positive sign in the 16 new entrants in this year’s list: “The new companies in this year’s event represent a huge achievement because they have showed significant growth over three years.”
Looking to the future O’Flanagan cites biotechnology as a key growth area but not without the right inputs. “The biotech sector is strong but it has to have the right commercial structures in place to exploit its potential. That means we need well resourced bio-incubator areas where ideas can be developed,” he says. Government support is critical to these initiatives and O’Flanagan believes that without it, the biotech sector will languish. “The right relationships between pharmaceutical companies and university research projects need to be established in order to grow this area.”
By Gillian Cope
Brief history of the Fast 50
The Fast 50 programme is a ranking of the fastest growing technology companies in Ireland based on revenue growth over three years. It started life in Silicon Valley in 1995 and became a benchmark of success across the US and other countries around the world.
The programme is organised by Deloitte’s technology and media group and companies recognised in the event benefit from positive media coverage and recognition from both business and financial communities.
All UK and Ireland Fast 50 winners are also nominated into the European Fast 500 programme, a ranking of the fastest growing public and private technology companies throughout the whole of Europe.