Growing more than just businesses

What is the secret ingredient for rapid business growth? A good product, a defined and growing market, and perhaps even economic tailwinds will all help, of course, but for Ireland’s domestic technology sector, the secret appears to be to think beyond borders.

Scalability is fundamental to any technology business model, and particularly in Ireland where geographic expansion and the ability to internationalise is paramount given the comparatively small domestic market. That is according to James Toomey, partner at Deloitte and Technology Fast 50 programme leader.

“In Ireland, you can only scale so much. As a result, there’s a huge number of indigenous technology companies who are exporting outside of Ireland and really putting themselves on the map from an international technology perspective,” said Toomey.

This external focus is good news not only for the businesses concerned, but also for the country as a whole. After all, Ireland is home to a large number of the giant tech multinationals who dominate the globe. And if the tech sector is about anything, it is about creating the conditions where a good idea can scale from a concept to a viable business and eventually, to a world-leader.

As a result, the Fast 50 programme is not only something of a bellwether for the health of the sector, but an incubator of tomorrow’s champions. Moreover, it has tracked the country’s transformation into Europe’s acknowledged technology hub.

2024’s champions

According to Toomey, some of the businesses that placed in this year’s awards could already be described as multinationals.

“That’s a big part of the export-focused nature; over the years the Deloitte Fast 50 has seen a number of unicorns qualify including this year’s overall winner, Wayflyer,” he said.

Unlike other awards, the Fast 50 programme is purely quantitative in nature, measuring revenue growth over the last four years, meaning it has real credibility.

Overall, this year’s entrants demonstrated an average growth rate of 572 per cent – though some saw much more. For example, Wayflyer, a fintech business that provides funding for e-commerce businesses, saw over 3,000 per cent growth.

The total revenue generated in their last financial year by the 50 ranked businesses was €1.4 billion, with average revenue coming in at almost €28 million, and between them the 50 winners employ 6,227 people.

2024’s awards saw 11 first-time winners, which is remarkable as placing in the awards was a taller order than usual.

“This year the minimum growth rate required to rank was the highest it has ever been,” Toomey said.

This is in spite of economic headwinds experienced in recent years, notably inflation and the resultant rises in interest rates. What is significant, Toomey said, is that the businesses that have thrived in these conditions have proven their resilience and ability to scale.

“At times, and particularly during the pandemic, you had companies who went through the roof [in terms of revenue] and then dropped off, but here we are seeing more sustained and sustainable growth,” he said.

Toomey said that access to capital has also improved in recent years, with private equity and venture capital hunting for future success stories.

In addition, the inflationary macroeconomic environment also meant delayed new business and customer signings.

“It has been a somewhat challenging environment in which to raise capital, but what we’re seeing is there is a huge amount of capital out there to be deployed. However, it is concentrated in lower risk, premium businesses. Investors are focusing more on the tier-A businesses,” he said.

Good news for companies that rank in the Fast 50, then, as they have already proved themselves in the marketplace. However, the ongoing – and global – shortage of skills was reported as a major challenge, Toomey said.

“Hiring talent is the number one challenge for most. Getting good software developers, engineers, and technical people is like finding hen’s teeth, and retaining them is difficult too,” he said.

And yet, fast-growing tech businesses need highly skilled teams. One response has been to become more creative in terms of how they incentivise employees.

“More and more are giving equity or growth shares, or structured bonuses, rather than just salaries,” said Toomey.

The awards also record shifts in the market, with the growth of sub-sectors ebbing and flowing as new technologies leapfrog each other in the quest to meet human needs.

“Clearly things like artificial intelligence (AI) have an impact. Nearly 75 per cent of companies mentioned AI as having a positive impact on their business,” Toomey said.

Data analytics is rapidly expanding, underscoring the importance of data-driven decision-making in modern business operations and that strong data is critical before you can consider AI.

Cybersecurity is also experiencing a surge, particularly in areas like threat intelligence and incident handling, with the rising prevalence of cyber threats driving this increased demand for cybersecurity expertise, he said.

While software continues to thrive, growing material concerns are also represented.

“Overall, we see the software sector, which is the dominant sector in the technology sector, and has always been the biggest cohort, as the strongest. However, the healthcare and life sciences sector is growing nicely, and is up on last year,” Toomey said.

“Environmental tech is a really interesting sector that has been getting a lot of attention. It’s still a small part of the Fast 50 cohort, but we’re seeing a huge amount of interest in it and, of course, growth,” he said.

Whatever the sub-sector and however they attract capital and employees, Ireland’s Fast 50 winners are proving themselves on the global stage: alongside the Technology Fast 50, Deloitte also runs the EMEA Technology Fast 500, which consolidated the results of the various national Fast 50s across EMEA.

“Ireland really punched above its weight, with 28 ranking this year. Think about it this way: Britain contributed the most overall to the Fast 500, with 81 companies ranking, but their economy is far more than three times our size,” he said.

This international dimension further contributes to the Fast 50’s value, helping to put their successes in the spotlight. “It’s a real platform for generating international interest – from both a customer and investor perspective,” Toomey said.

To find out more about the Fast 50 programme, contact Deloitte.