NDRC, the Dublin-based early-stage tech investor, has tweaked its funding strategy so that it can invest larger sums and resources in companies it backs.
The move comes as the organisation seeks to address a widening funding gap for entrepreneurs who come through its various accelerator programmes.
NDRC, which supports start-ups that are usually not mature enough to land significant funding, said it had become increasingly aware of issues faced by early-stage companies looking to secure external investment.
Chief executive Ben Hurley told The Irish Times that investors had become increasingly risk adverse in recent years and were putting less money into start-ups in favour of investing larger sums in more mature ventures. In light of this, he said the amount NDRC invests in start-ups will rise significantly this year.
In 2018, investment figures per company in Dublin ranged from €50,000 to €120,000. NDRC said from this year on it would now be making investments worth €135,000 per company, consisting of €100,00 in capital and €35,000 towards a longer, more intensive acceleration programme.
Industry access
Mr Hurley said this increase stretches its three-month Dublin accelerator programme to a near six-month one. This includes industry access, workshops and networking, and expert mentorship.
The organisation is also upping investment for start-ups in its regional programmes from €30,000 in capital and an additional €20,000 in programme activities, to €50,000 in capital, plus €25,000 in activities.
Speaking as he outlined details about NDRC’s activity last year, Mr Hurley said: “We’ve adjusted our strategy in order to offer an increased level of capital to each start-up we support to help bridge the funding gap they are facing.
“If the funding environment shows NDRC that a different response is needed in future, we will respond accordingly,” he added.
NDRC, formerly the National Digital Research Centre, was established in 2007 by a group of Irish third-level institutions. It has invested in almost 300 start-ups to date with alumni including Artomatix, Boxever, iCabbi, SilverCloud Health and LearnUpon, which was recently named company of the year at Technology Ireland’s annual awards.
Follow-on investment
The organisation said it backed 32 new start-ups last year with companies across its portfolio receiving more than €50 million in private investment and funding in 2018. This brings the aggregate amount of follow-on investment by NDRC companies to nearly €250 million.
Mr Hurley said the market capitalisation of its portfolio stood at nearly €500 million at year-end with NDRC securing more than €1 million in realisations throughout 2018.
NDRC, which is based in the Digital Hub in Dublin's Liberties area, runs two regional accelerators on behalf of Enterprise Ireland at PorterShed in Galway and ArcLabs in Waterford. It also runs an early-stage accelerator programme in Muscat in partnership with the Oman Technology Fund.
