Silicon Valley Bank is bringing America’s top VCs to Dublin

24 Jun 2016

Some of America's top venture capitalists will arrive in Dublin this weekend to meet with promising tech companies and investors

This weekend, 12 general partners from some of the biggest venture capital firms in Silicon Valley will descend upon Dublin. Leading the posse will be Irishman Mark Gallagher from Silicon Valley Bank.

Mark Gallagher, is a senior market manager who leads Silicon Valley Bank’s Technology practice and works with high growth innovation companies. He joined the bank in 2000 and is based at its Boston office.

In recent weeks, it emerged that Silicon Valley Bank is committing an additional $100m to the Irish tech economy as part of its relationship with the Ireland Strategic Investment Fund (ISIF). This is on top of the $100m commitment it made in 2012.

‘We hope that this will help ensure the emergence of some great trans-Atlantic syndicates’

Future Human

San Francisco-headquartered Silicon Valley Bank has $45bn in total assets and manages $83bn of client funds. The bank employs 2,000 people in the US, as well as Israel, Ireland, the UK and China.

Roughly 50pc of US venture capital-backed companies are clients, as are the majority of America’s venture capital players.

The American invasion

From this weekend and through much of next week, 12 of the most powerful general partners (GPs) from US investment firms are going to be in Ireland to meet with Irish innovators, Enterprise Ireland and ISIF, and the National Treasury Management Agency.

During the course of the week, the GPs will see companies covering key areas such as digital health, internet of things, enterprise SaaS and fintech.

For Gallagher, the best part of the last 16 years at Silicon Valley Bank has been witnessing the rise of the innovation economy.

“When I joined, it was in the middle of 2000, right at the peak of the bursting of the bubble. Things had started to settle in 2001 and then 9/11 happened and that sent a curve through all the capital markets.

“What was really interesting is our CEO at the time decided that, because we are a services organisation, relationships are based on individuals, and he worked hard to ensure we didn’t go through the pattern of layoffs or reductions. It was a brave decision because we were a new entrant to the market at the time and most of our competitors were reducing their commitments and all we had was tech and life sciences.

“But I believe it laid the foundation for the success we are seeing today. The recovery in tech began around 2004, culminating in a market correction in 2008 and it was challenging until around 2013.”

While tech IPOs are still rare, they are happening. Last month, one of the bank’s clients, Acacia, had an IPO and, yesterday, Twilio floated on the New York Stock Exchange, doubling in value to $2.4bn at $29 a share.

The latest phase for Silicon Valley Bank is its overseas expansion. But it will be news to many that Silicon Valley Bank has, for a long time, worked with overseas companies, including Cork’s Qumas, which was acquired by Accelerys in 2013 for $50m.

While the bank hasn’t established a branch in Ireland, it has appointed  Clive Lennox, who has moved from London to Dublin, as director of Irish Business Development.

Gallagher hasn’t ruled out the idea of a Silicon Valley Bank branch opening in Dublin at some point in the future, but that may take time.

His colleague Andy Tsao moved to the UK in 2005 and has recently returned, but it wasn’t until 2012 when the bank sought and obtained a banking licence in the UK.

“We look at a number of things when we think of expanding internationally: that there is access to capital and whether there is a mature or growing venture capital community, and Ireland is demonstrating that with new players like Frontline and Atlantic Bridge, as well as older players like Delta and ACT; we also like to see spinout activity from universities; and another element is larger scaling companies, as well as multinationals.”

The hidden aces in Ireland’s deck

Gallagher says that a key factor that is overlooked when discussing scaling in Ireland is the fact that companies like Google, Facebook, Microsoft, Intel and LinkedIn are doing a phenomenal job in educating senior managers in Ireland how to grow and scale businesses.

“That talent base is important for scaling commercial enterprises and we’re seeing this in abundance, and it’s a strong reason why we are focused on entering the market robustly.

“It’s a serious commitment for us to establish an individual on the ground full-time. But will that lead to a bigger presence? Every time, we enter the market in the same fashion by putting boots on the ground. That’s how Andy Tsao came to London and we now have a branch there.

“So who knows?”

A key part of the bank’s modus operandi is to work very closely with promising companies as early as possible in their development journey. “Our commitment is to work with them from their earliest days and stay with them as they grow in scale and build more products and services.

“Clive will get to know the ecosystem and will work hand in hand with Enterprise Ireland and the venture capital firms to identify the young companies we need to know about.”

Although Gallagher has been out of Ireland 16 years, he feels the Irish Government has demonstrated commitment to fostering innovation, and the overall perception in the US is that it is a progressive force in building Ireland’s innovation economy.

“If there are frictions, I don’t know where they lie, but from what I can tell the Government is a forward-leaning and progressive partner to innovation.”

From this weekend, Gallagher and colleagues including Barry O’Brien from Silicon Valley Bank will lead a delegation of VCs to reveal the rate of innovation in Ireland to America’s top venture capitalists.

“We hope that this will help ensure the emergence of some great trans-Atlantic syndicates. We will hold a meeting with innovation companies that will have 110 participants and then a smaller client innovation day for the GPs,” Gallagher said.

“It’s a great delegation that is coming and we expect to build some great relationships between the US venture capitalists and the local innovation scene.”

Dublin image via Shutterstock

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