Sitting among the derelict warehouses and iconic cranes of Belfast’s once thriving industrial dockland, the Northern Ireland Science Park’s (NISP) Innovation Centre is the hub of the region's emerging tech scene. Initially established through government funding following the Good Friday Agreement the NISP is now a self-sufficient home for some of Belfast’s most-promising companies and a driving force for economic growth in this still-troubled region.
“We operate a line of peace through prosperity,” says Peter Edgar, programme manager at NISP Connect, an organisation aiming to support the development of innovative companies. “If you create wealth and opportunity for people here they'll be more content and create a more peaceful, collaborative society and a big part of that is attracting jobs, but also attracting the right jobs.”
NISP and the Innovation Centre is home to companies ranging from digital media to enterprise software, as well as science, engineering and medical tech. While the tech scene is still at an early stage NISP Connect sets itself some big targets and Edgar says: “It's framed around this vision that by 2030 this could be one of the most inventive and creative places in Europe. We believe in tech and startups as the way to do that.”
NISP 2030 Targets
The organisation aims to create 500 startups per year by 2030 and claims it’s on target to do so, with 295 launched last year. However, it’s the success of these companies and their investors that will drive future development and investment in Northern Ireland’s tech and knowledge economy sector, with NISP aiming to see 24 IPOs by companies in 2030.
Hoping to develop an early interest in tech and entrepreneurship, as well as unlock talent already within the region, NISP Connect has run three flagship programmes over the past six years. These range from Generation Innovation -a social network for anyone who wants to work in the tech industry from 16 to 18-years old to the Invent Awards, which aims to discover inventions and commercial talent in the region. There’s also Springboard, which leverages the top entrepreneurial minds to help the most talented businesses coming through. It’s effectively an accelerator, however the company does not take any equity from participants and for now the work is done on a pro bono basis.
Culture, Talent And Funding
NISP identifies three key factors holding Belfast’s tech scene back –culture, talent and, that old favourite complaint of startups, funding.
“Traditionally young people the cultural norm was that you had to leave this place to get a job as there were few opportunities; however, that culture is changing as young people are starting to thrive in this vibrant and emerging city which is gaining confidence again,” says Edgar. “We try to change that for young people and say 'you can do really cool, interesting jobs here. You can start companies and either make your fortune if that's what you want to do or you can solve a big problem in the world through science, technology and engineering.’ We've got to change that culture and make entrepreneurship an aspiration instead of being a doctor, lawyer, accountant or civil servant.”
They say the city’s airport is named after footballer George Best as it’s the first place he went once he could afford to leave and the migration of talented workforces, so called the ‘brain-drain,’ is a major hurdle for the city’s tech scene and impacts the growth of local success stories. However, there are signs of improvement.
“Going back three years we struggled at first because there was a bit of apprehension towards startups,” says Paul brown CEO of screen sharing, presentation and collaboration tech company DisplayNote. “Our CTO was living in Spain so we advertised there and found it easier and cheaper as well. We find it easier to hire in Northern Ireland now though, because there's more of a story behind the company and more security. We’ve never seen the need to hire out in the US.”
One of the major challenges for any emerging tech hub is access to funding. With the money pouring into US companies growing each year (alongside their valuations), smaller regions are often left playing catch up in attracting talent and money. Northern Ireland still absorbs a lot of cash from Westminster and government funding plays a big role in supporting young companies.
“It's both good and bad,” says Alan Watts, director of local business angel network Halo, spekaing about local investment. “There's a lot more government kicked-off activity here than you'll get in other regions. Invest NI have intelligently seeded a number of things with a seed fund which invests circa GBP150,000 (USD228,000) at the investment stage.
However, it also looks after proof of concept funding. It will give out GBP10,000 (USD15,000) and GBP40,000 (USD60,000) grants at the very early, pre-investment stage which is quite useful. So at that early stage level there is a fair amount of activity. However, there is only one fund and we would contend that that one on its own is not enough.”
Halo has invested almost USD10m over the six years and that funding is aided by a government-run co-investment fund that matches what angels put in to increase the overall size of rounds available to companies.
There is also Lough Shore an investment group made up of successful entrepreneurs with the aim of achieving an exit as proof to US investors of the ecosystem’s potential in order to create a local VC fund.
“We will get a fully-fledged northern Ireland VC without government money in it at some stage. But it's a work in progress,” says Watts.
While Northern Ireland’s relationship with the Republic of Ireland continues to create tension, business and tourism deals between the regions are creating significant opportunities and allows Belfast startups to often look south for potential investment. Ad tech company Sophia raised USD3.7m in a Series A round from Atlantic Bridge, a global VC with offices in Dublin.
DisplayNote also saw investment come from the Republic of Ireland, with county Cork-based Kernel Capital Partners investing USD1.6m in the company last year. Brown says the company is yet to start spending that money, but will use it to push further into the US. The company is looking increasingly global and Brown say that the company will look to US investors next time it raise capital.
“We'll always have a presence in Belfast,” says Brown, somewhat hopefully. “But from development perspective, we've probably already set our marker out there in that we have a back-end team in Spain. On the user acquisition and sales side, we need to push out more into the US, which will mean having a US entity. Does that ultimately become a US parent? We'll wait to see, but there'll always be a presence here.“
Look out for our upcoming round-up of Belfast startups to watch