Frontline Ventures, the early-stage tech-focused venture capital firm, has put out a call for ambitious Irish entrepreneurs as it announced plans to invest €10 million in early-stage business-to-business software companies over the next 12 months.
The Dublin-headquartered firm, whose portfolio companies include Boxever, Currencyfair, Linked Finance, Pointy and Roomex, said it is targeting four to five investments of between €1 million and €2 million in ambitious founders who are post-product but may in some cases be pre-revenue.
In addition, it intends to make a similar number of investments of €250,000 via the AIB Discovery programme into businesses that are in most cases pre-product.
Finn Murphy, an investor at Frontline, said the VC was putting out a call to action that he hopes will "shake the trees" and uncover ambitious Irish early-stage founders who may be unsure if they are ready for outside investment.
The firm is also keen to reach out to talented individuals working at established companies who have a business idea and are ready to take the leap and establish their own business.
Springboard
“We’re in the market to be a springboard for founders chasing those large opportunities. Whether it is investing €250,000 to validate that a big market opportunity really exists, or €2 million to build a world-class team and a product that can scale, Irish software companies are competing on a global level from day one, and we believe you need to fund them as such,” said Mr Murphy.
Frontline, which has offices in Dublin and London, was founded in 2012 and is managed by partners Will Prendergast, Shay Garvey, William McQuillan, Steve Collins and Stephen McIntyre. Mr Garvey was earlier this year appointed as a non-executive director to The Irish Times board.
The VC firm, which announced a €60 million fund in 2017, has been highly active of late with recent investments in companies such as AQMetrics, BrightFlag, Logical Clocks Modulz and Umba.
Mr Murphy said while there is funding available for Irish start-ups, much of that available is unsuitable for B2B-focused start-ups.
Selective
“There is a huge amount of funding available for early stage venture in capital markets right now. The challenge? That capital is only interested in high-growth stories. Fifty per cent annual growth isn’t enough anymore for many funds. They’re so large that to make the economics work they need massive outcomes. This is resulting in larger amounts of funding being concentrated in a smaller amount of companies that are chasing really large outcomes.”
Co Mayo-based fintech start-up Payslip, which is led by former Taxback chief executive Fidelma McGuirk, is another company that has received funding from Fronline. Ms McGuirk said in her experience, being selective about the investor you choose is critical for success.
“There’s a lot of money looking for a home in the Irish market, making sure you learn the funding process from people who really are VCs or professional investors, or from other entrepreneurs who have been down that road is the important lesson,” she said.
“Many private investors don’t relate to start-up metrics. Having a VC with a specific interest in tech start-ups, as lead or only investor, offers additional shared learnings from their investee portfolio as well as a smoother investment path,” Ms McGuirk added.
