NDRC companies’ market cap nears €500m

6 Jul 2018

From left: NDRC CEO Ben Hurley with Communications Minister Denis Naughten, TD, and NDRC chair Sean Baker. Image: Shane O’Neill/SON Photographic

Dublin’s NDRC notes rise in follow-on investments in promising young start-ups.

The National Digital Research Centre’s (NDRC) portfolio of companies has achieved a market capitalisation of €486m, up 14pc on 2016, according to the organisation’s annual report for 2017.

Established by the State in 2007 and based in the Digital Hub in Dublin, but operating nationally, NDRC has to date built and invested in 255 companies.

‘One-quarter of our start-ups have secured at least €250,000. After a decade of investing, this is a significant achievement’

Siliconrepublic.com recently reported that Communications Minister Denis Naughten, TD, secured Government approval to continue funding the NDRC because it has proven itself to be value for money for Ireland’s economy. Research from economic consultant Indecon has found that the NDRC delivered a net economic benefit of €73.5m for the State under the leadership of CEO Ben Hurley.

“This is central to the Government’s strategy of supporting indigenous entrepreneurial activity by investing in very early-stage digital ventures,” Naughten said.

Rise in follow-on investment

One in four NDRC start-ups go on to secure more than €250,000 in follow-on funding. The total follow-on investment rose 26pc on 2016, reaching €192m across the portfolio.

Significant raises through companies such as Nuritas, Drop and Tandem HR were recorded during 2017, with a strong year ringing in NDRC’s first ‘Decade of Investing’.

Approximately 1,000 people are employed directly across NDRC start-ups, with 20pc based abroad in a true reflection of the global focus NDRC has on its investments.

According to its research, 31pc of its start-ups have female founders on their team. These include Nuritas and Tandem HR, which raised more than €17m between them last year.

In 2017, NDRC invested in, mentored and accelerated 28 digital start-ups, which were selected from a competitive field of 350 applications for NDRC investment.

One in 12 applicants secured investment, which is a clear indication of the high-quality bar set.

Rise of the regions

Ben Hurley, CEO, NDRC. Image: Shane O'Neill, SON Photographic

Ben Hurley, CEO, NDRC. Image: Shane O’Neill/SON Photographic

Last year, NDRC launched the first of two regional accelerator programmes, in partnership with Enterprise Ireland.

Also in partnership with Galway City Innovation District, NDRC at PorterShed welcomed nine start-ups into the organisation’s portfolio.

“We want to deliver a sustainable supply of globally scalable Irish digital companies, which in turn create high-value jobs in the Irish economy,” said Hurley.

“The fact that nearly 1,000 people are now employed by our portfolio companies – about 800 in Ireland underpinning our direct impact on the economy and about 200 internationally highlighting the global reach of our companies – is testament to an effective and impactful investment model.”

Defining the investment gap

NDRC chair Sean Baker said the organisation plays a crucial role in preparing young companies to be ready to attract seed funding.

“NDRC’s latest results show how our aim of increasing the economic impact of our ventures is working. What we do, investing in the early stage pre-seed space, is fraught with risk. It is impossible to fund just the safe bets, because there are none at this early stage in companies,” Baker said.

“This defines the gap, the crucial time during which it’s impossible to attract sufficient private funding, the gap that the State must fill. We also believe that the gap is defined by the lack of experienced support, so NDRC provides extensive support for start-ups, helping them to be ready for seed funding.

“This is represented by the fact that one-quarter of our start-ups have secured at least €250,000. After a decade of investing, this is a significant achievement.”

John Kennedy is a journalist who served as editor of Silicon Republic for 17 years