Several innovative Irish start-ups are choosing to move their fledgling businesses to other countries due to difficulties around product adoption, funding and market entry, according to the boss of Vaultree, a Cork-based cyber security company. Chief executive of Vaultree, Ryan Lasmaili, said after his company raised $12.8 million (12.14 million euros) in a series A investment round.
The investment was led by Molten Ventures together with Ten Eleven Ventures and builds on Vaultree’s October 2021 seed round of $3.3m. While Lasmaili shared that he felt Vaultree had received “massive support from the Irish ecosystem,” he believed that the company was one of the “rare cases”, with many innovative Irish start-ups either moving to the United States or the United Kingdom.
“Ireland uniquely is in an amazing situation location-wise, five hours away from the US, next to the UK and in the EU. It has massive benefits in terms of government support and so on. But what we have seen among start-ups, ourselves included, we have been extremely tempted just to say, ‘hey, it makes way more sense just to move to the US.”
He added: “Just last week, I was on the phone to another Irish founder, and she is moving to the US. For her, she said funding, product adoption and entry to market were all difficult. Out of 10 Irish founders (I know), I have seen six of them move to the US, that is massive.” Lasmaili, who said Vaultree would continue to base itself in Ireland and is optimistic about the sector here, said the Irish business ecosystem needed to be faster to adopt innovations from start-ups.
He said: “Large Irish companies or those with HQ in Ireland don’t adopt Irish innovation – it is predominately first adopted outside of Ireland, in the US and the UK. I hope that changes in the future because I don’t think it should be the US or others that first embrace Irish innovation. It should be local Irish companies saying, ‘hey, they could help us.”
Lasmaili said that many innovative Irish start-ups in the research space across technology, cyber security or health were being snapped up “very quickly” by US enterprises.
“To give you an insight, we have already received acquisition offers. We received our first offer three months out of the seed round. For us, it wasn’t about being gobbled up right away but actually have more of an impact. This is another threat to innovation in general. Literally two years out of fundraising, they disappear – not in Europe but across the border.”
Lasmaili said raising funding in the current economic environment can be extremely difficult. “There is really a bushfire going around,” he said.
“Personally, I think a lot of start-ups are going to disappear in 2023.” However, he said he was “thrilled” with Vaultree’s $12.8 million raise, which he added had not been affected “much” by the current issues the technology sector has been facing.
Vaultree will use the proceeds from the funding round to advance to sales, marketing and the development of its data-in-use encryption technology. Lasmaili said he will now look to add between 20 and 35 staff this year to his team of nearly 50.
“Operationally, we are looking at growing in Ireland significantly and in Europe and the US. As we are growing fairly fast, we have been blessed with a massive inbound lead of enterprises coming to us and asking for us to help them”.
He added: “We have seen insane demand for our technology. The teams that will grow the fastest will be the operational teams, the technical sales engineers, sales support and research and development.” (The writer is our foreign correspondent based in the UK)
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