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DSO News: September, 2014 Archive

Buy gift vouchers for local businesses – from anywhere on earth

Thursday, September 25th, 2014

Maria Carolan’s start-up Local Gift Cards gives shoppers from anywhere in the world access to gift cards from Cork businesses. The Clonakilty-based mother of three (38) is now planning to expand nationwide.

“My business gives local retailers an online platform to sell gift cards 24 hours a day, 365 days a year.

We have almost 30 retailers signed up with more coming, having only launched the site in June.

I am from Dublin but have been living in Clonakilty for about 12 years. I have sisters in the US and UK and come Christmas-time or birthdays, they would always say they found it difficult to buy me something I would use.

It would be ideal, I realised, if they could somehow buy gift cards or vouchers for the local shops I visit all the time. The idea was born from there.

Everything is delivered online, through my website www.givealocalgiftcard.ie. Each retailer has a profile. Customers can purchase gift cards instantly, which arrive beautifully wrapped. It is perfect for the diaspora who are buying presents for family back home and who prefer to shop locally.

I went to West Cork Enterprise Board with my business plan and they approved a grant, which was hugely helpful. I also got a bank loan from Bank of Ireland, which was great.

Business is really picking up. Retailers are keen to be registered on the system before the Christmas rush. We started out with Cork companies but will have expanded to the rest of Munster by then. Examples already live on the site include a Clonakilty butcher, a hairdresser, a hotel, toy shops and a cinema.

We look likely to break even next year. Revenue comes from an annual subscription charged to the businesses listed with us, rather than a commission system. We charge €120 a year plus VAT, roughly the same as taking out an ad with a local newspaper or radio station. Lots of other gift card schemes, like One4All, are free to sign up for – but charge a commission per sale, in some cases up to 20pc. My research found retailers don’t like this. They feel they are already selling at a discount in the current environment.

The biggest challenge has been convincing companies that have no experience online selling. They know they need an internet presence but are still apprehensive, worried we will not represent them correctly. I also underestimated how long things would take. You need to allow extra time. The website, for example, took longer than I expected.”

Are you are looking for a serviced or virtual office in Dublin City Center or Dun Laoghaire, call us at Dublin Serviced Offices on 01 2020212

Spark of Genius: Three Irish start-ups to compete for €25,000 prize

Wednesday, September 24th, 2014

Europe’s biggest startup competition has chosen three Irish finalists to compete for a €25,000 prize and a fast-tracked advancement process with senior US business executives. 

The Web Summit’s lucrative European ‘Pitch’ competition will see three startup finalists which emerged from the ESB-sponsored Spark Of Genius startup contest. The ESB contest featured a shortlist of 30 Irish startups from a longlist of hundreds.

The three chosen finalists are  a 3D printing service, a public procurement platform and a system that cuts down on tinnitus.

Other contenders ranged from consumer sentiment apps to online fashion retailing, social gaming, crowd funding and reading recommendation services.

One of the three finalists, Love and Robots, is a service that allows users to pick products and have them delivered or their 3D design downloaded to a local 3D print facility for quicker delivery. The service also allows users to alter or tweak designs of products before they are 3D printed. The company, run by sisters Emer O’Daly, Kate O’Daly and Aoibheann O’Daly, is a rebranded version of FabAllThings.com.

Another finalist, TenderScout, creates ‘market intelligence’ for companies whose business is partially based on winning public sector contracts. The software gives companies more accurate predictions on their likelihood of competing for, and winning, public sector tenders across Ireland, Britain and the rest of Europe. The company was founded by Tony Corrigan, who also owns an IT consultancy, Komino.

The last finalist, Restored Hearing, helps reduce the incidence of tinnitus based on patented materials and processes it has developed. The company, which was recently accepted in Dublin’s Wayra Academy with ?40,000 of funding, was co-founded by chief executive Rhona Togher and chief technical officer Eimear O’Carroll.

The competition’s judges included Dublin’s new ‘Commissioner for Startups’, Niamh Bushnell, KPMG’s David O’Kelly and Mary Moloney, global chief executive for the CoderDojo Foundation.

All three startups will now enter a final round of competition at the Dublin Web Summit’s Pitch competition, which sees 2,200 European startups compete to make a final list of 200. The 200 are then scheduled to pitch to some of the hundreds of senior investors at the Web Summit. This year, however, the Web Summit has said that it is accelerating the three ESB Spark Of Genius winners into the final part of the Pitch competition, resulting in a final tally of 203 entrants.

“I was blown away by the depth and quality of all of these 30 startup pitches,” said Marcus Segal, the Web Summit’s Entrepreneur in Residence who co-hosted the event at the NDRC’s headquarters.

“I’ve told them that I’m definitely interested in looking at some of them again and maybe helping them with questions they have on further funding. Because you don’t normally see this kind of quality in a startup contest.”

Segal was formerly chief operations officer for Zynga, creator of Farmville and one of the largest ‘social gaming’ companies in the world.

“We had hundreds and hundreds of entries for this competition,” said Bernadine Maloney, corporate communications manager at ESB. “It took quite a long time to get it down to 30.”

Previous winners of the Pitch competition have gone on to achieve global fame, with 2012 winner SmartThings recently acquired by Samsung for ?155m.

The two winning teams will be flown to Coca Cola’s headquarters in Atlanta, Georgia, to meet with executives for strategy sessions on their startup.

More than 20,000 people are expected to see Hollywood star Eva Longoria and supermodel Lily Cole joining tech titans such as Tinder founder Sean Rad and star venture capitalist Peter Thiel at Dublin’s Web Summit in November.

The global conference, which will also host Dropbox founder Drew Houston and former Apple chief executive John Sculley, has announced its expansion as a “festival of ideas”, incorporating major new sections in sport, film, food, film and music.

Are you are looking for a serviced or virtual office in Dublin City Center or Dun Laoghaire, call us at Dublin Serviced Offices on 01 2020212

How one ambitious Irish start-up became a Mainstay of venture investment

Friday, September 19th, 2014

The Dublin-based Mainstay Medical offers a rare insight into how a startup with a great idea goes about bringing a life-changing product to the market, reports Ian Campbell.

A cure for lower back pain might sound like a tantalising start-up pitch, but the circuitous journey that Mainstay Medical has taken – from MinnesotaMinneapolis, to Swords, Co Dublin – highlights that there is no easy route to market for a medical device company, however good the idea.

This is a sector where every step is hard earned; where you need committed investors from the outset and a focused team that can edge you towards regulatory approval and commercialisation.

Mainstay is targeting a multi-billion dollar market with a neuromodulation implant, ReActiv8, which stimulates nerves in the back to stimulate muscle contractions. Employing 22 people, with eight based in Ireland, the firm is now trialling its treatment around Europe and Australia. A year from now it hopes to get European CE Mark approval that opens the door to commercialisation.

North America and FDA approval will be the next phase, but Peter Crosby, president and chief executive of Mainstay, has been in the game too long to take anything for granted. “We have some pretty exciting data from the trials and there’s potential for a very large business, but like any early stage company it is not without its risks,” he says.

To take a full implantable device to market takes years and millions of dollars. Unlike other technology startups, which only look for serious funding after they have acquired some customers, med tech firms need high levels of early stage investment. For Mainstay, a first funding round of $6m in 2010 was used to make sure the idea works. The next round in 2012 raised the $20m to bring the product to clinical trials and get it ready for market.

A consequence of the need for large early stage investment is that med-tech startups tend to be run by seasoned professionals and backed by equally expert financiers.

They know the sector inside out. Australian Peter Crosby has been chief executive or chairman of seven medical device companies in four countries. Its American founder, Dr Dan Sachs, is a serial entrepreneur who initially set it up in a Minneapolis cluster of similar companies.

So how did they end up in Europe? Venture capital is a bit of a fashion industry, according to Crosby, and interest in medical devices has blown hot and cold in the US for the last decade. But there were other factors that persuaded Mainstay a move to Europe might be a good idea.

The company was formed in 2008 at the start of the recession, when US investors were less interested in startups than picking up bargains around established businesses that were struggling.

Following the money to Europe soon led Mainstay to float on the Euronext, Paris, the pan-European stock exchange that has proved to be a good place for early stage med tech companies to list and attract investment. The firm also floated on the Enterprise Securities Market of the Irish Stock Exchange.

And why Ireland? Manus Rogan, co-founder and managing partner of Irish VC, Fountain Healthcare Partners, picks up the story. “We took the lead in the $20m funding round which involved relocating Mainstay to somewhere in Europe. It came down to Switzerland or Ireland. We played a major role in persuading them to set up here,” he explains.

With a strong pharma/medical device sector, where more than 500 companies employ over 50,000 people, Rogan says it’s easy to make the case for Ireland. Crosby was impressed and sees some value in the ecosystem, but makes the point that most of the activity has been around large multinationals.

“Ireland has a great presence in the sector but not with early stage companies. So we are forging a new path, but a new path in a great forest with lots of trees.”

A benefit of the multinational presence is a rich talent pool, something that helped Fountain as it spent the last 10 years building its business around the sector. “All the skills are a great resource for venture-backed companies,” says Rogan.

The decision to invest in Mainstay was made because the company ticked crucial boxes for Fountain. Rogan liked the people, the technology and the space they were targeting. “We saw a huge market opportunity that was poorly served with minimal competition. Their data looked promising so we put our money to work to ask key questions in clinical trials,” he says.

“Hopefully it leads to products that will be approved by the regulator and subsequently marketed, but there is a big body of work ahead. That’s the nature of what we do.”

Press him on the appeal of such high-risk investment strategies and he comes back with compelling statistics.

“Of the 7,000 known diseases there are treatments for only 500. There is a lot still to be done,” he says.

“New apps and social media are nice to have, but what society really needs is new drugs, medical devices and diagnostics.”

Rogan describes the VC/startup relationship as a courtship and eventual marriage, with both parties in it together for the good times and bad. To extend the analogy, it helps if both sides have been married before. Mutual experience is vital, as Peter Crosby explains.

“If a VC is talking about investing in a medical device company for the first time, I know I’m asking for trouble. Most of the early board meetings would be taken up with teaching someone. With experienced investors like Fountain, we get straight down to business,” he says. “And it works both ways. The VC doesn’t want to have to waste time teaching the CEO their job.”

With such high stakes and early stage interest from the VC community, you could be forgiven for thinking that exit strategies are a regular topic for discussion at board meetings. Not so, according to Crosby.

“Thinking about acquisition early on is generally a disaster. You have to focus on the business and growing the business,” he says. “Our strategy is to build, a successful global company that’s profitable and creates value for our shareholders. If someone else recognises that value, then fine, let’s have a conversation. But anyone who tells me they are building a company to sell is delusional.”

There is nothing delusional about the results of the early trials, where 74pc of patients reported a clinically important improvement in back pain and 85pc an improvement in quality of life. Mainstay Medical is one to watch.

Are you are looking for a serviced or virtual office in Dublin City Center or Dun Laoghaire, call us at Dublin Serviced Offices on 01 2020212

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