Innovators seek the sweet spot between need and funding

Over the past 13 years, more than 650 would-be entrepreneurs have shared their aspirations for their new businesses in the New Innovators column. What’s encouraging about this is that even though 90 per cent of start-ups fail, people keep trying. Their ideas may have changed to reflect opportunities in emerging areas such as sustainability and artificial intelligence (AI) but what continues to unite them is the belief that their product or service has the power to change the world.

One such product is ViperClip, a non-conductive plastic staple that secures electric cables five times faster than existing fixing systems. The product is the brainchild of Northern Ireland-based electrician Davy Gray, who had the clip idea running around in his head for years. In 2015, Gray and his wife, Julie, decided to see if the idea had legs: eight years and a lot of money and heartache later, ViperClip is ready to hit the shelves.

The Grays tapped into the technical expertise of Queen’s University Belfast for help with the development of the plastic compound for the staples and Julie Gray estimates investment to date at close to €1.2 million between private backing and support from Invest Northern Ireland. Like many start-ups in search of cash, the Grays tried their hand in the UK’s Dragons’ Den, but although their appearance generated big interest in the product, there was no investment as they decided to go with local funding instead.

“We had planned to market ViperClip as a product for electricians wiring houses but because it can be used in difficult conditions, we’ve had calls from electricians wanting to wire cowsheds in Scandinavia, glamping pods in the Netherlands, trailers in Ireland, caravans in England and a whole town in Scotland. As a result, we are casting our customer net a lot wider,” Julie Gray says.

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Raising money is a perennial challenge for start-ups, but savvy investors are good at spotting potential. In February 2023, Cork-based speech technology company, Teleatherapy (which provides voice therapy to those affected by Parkinson’s disease) raised €700,000 in pre-seed funding from private investors and Enterprise Ireland, led by its founder Clare Meskill.

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And, in November, Mayo-based cyber risk management platform, Cytidel, which was founded by Matt Conlon and Conor Flannery in 2021, raised €1.3 million from Elkstone Ventures and Enterprise Ireland to grow its engineering operation and add another 10 jobs to bring its team to 16.

Tom Flanagan, director of enterprise and commercialisation at UCD’s Nova innovation hub, says one of the main reasons start-ups fail is because they have a solution in search of a problem rather than the other way around.

“Central to success is a well-identified, high-value need with sufficient scale to make it attractive to investors,” he says. “Pre-seed funding is easy enough to get; after that it can become more difficult. From what we’ve seen over the last year, Series A has been very tight. However, these things tend to be cyclical and, from a funding perspective, businesses in AI, life sciences, cybersecurity and new energy technologies are all of interest to investors.”

Founders need a strong belief in their product or service to withstand the inevitable challenges they will face, but knowing when to tweak or pivot is key to hitting the sweet spot.

When David Hogan, founder of Smartflow, spoke to New Innovators in 2019, his focus was on selling his water-monitoring system to the hospitality sector but then Hogan noticed just how fast sustainability was climbing the corporate agenda. His Eureka moment came when he recognised that the real potential for Smartflow lay in the commercial property sector.

The company refocused its efforts and “the business took off like a rocket”, Hogan says. He now employs 14 people and expects to get close to doubling this by the end of this year. The company has spread its wings into the British and US markets and is close to signing distribution deals for Canada and Australia.

“I think naivety is a superpower because if you knew what was ahead, you wouldn’t start. I wouldn’t characterise our success as a quantum leap. It was more like minute daily steps forward,” says Hogan who has raised about €1 million between an angel investor and Enterprise Ireland.

“I’d advise anyone looking for investment not to focus only on the money. Money is easy to get if you have a good product. What you also want is experience, someone who has walked the path and can be of strategic value to the business. Knowledge is power: be careful who you take money from.”

Entrepreneurship is about attitude not age. Clare Tait was 50 when she decided to give up her job in adult literacy to set up vegan chocolate-making business, Chocolatey Clare. For Tait, it’s always been about producing a “delicious product that is 100 per cent sustainable and ethical”. Tait won’t buy from countries with oppressive regimes, she’s particular about where she sells her products and all of her business decisions have to stand up to ethical, sustainability and environmental scrutiny – something that goes down well with socially conscious customers.

Tait was working from her rented kitchen when the Covid-19 pandemic struck and changed everything. In a nutshell, she wasn’t making enough to cover her costs and, in 2021, she outsourced production to a fellow artisan chocolatier who works with her recipes and ingredients.

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“Running a small business is a series of ups and downs and it’s been tough with ingredient costs rising when you’re committed to paying fairly at every point along the supply chain,” says Tait, whose business is now generating a small profit. In December, Tait launched a new range of chocolate bars in collaboration with visually impaired artist Clara Ryder, who designed the distinctive packaging.

December also marked the soft launch of SizeWise, an AI-based shoe-sizing solution that allows parents to scan their child’s foot using a smartphone to ensure the correct fit. SizeWise has also been some time in gestation, having started off as an idea at the back of Alan Power’s mind that only got going when he was completing a master’s degree in mobile product design.

Intensive development on the technology behind SizeWise started in 2021 when Power secured EI commercialisation funding of €400,000 and teamed up with experts from CeADAR, Ireland’s centre for Applied AI based at UCD. The company was subsequently spun out from the university and Power says the focus since has largely been on making the product market-ready. Full commercial launch is scheduled for the first quarter of 2024.

“What we emerged with was a pretty raw product that needed to be refined and, in our case, turned into a SaaS platform that any footwear retailer could use,” Power says.

“We are targeting independent retailers but also the big brands as the system is universal. The market opportunity is significant because two out of three children are wearing footwear that is too small, and problems with sizing become even more acute when shopping online. Retailers experience returns of up to 40 per cent on online sales and poor fit is the reason in 68 per cent of cases,” says Power, who is currently raising €750,000 to expand the team, support the British launch and drive entry into new markets.

When Cathal O’Reilly, founder of sustainability-focused social enterprise Narcissips, appeared in New Innovator towards the end of 2022, he had given up his job as a consultant with PwC to focus on developing his business. Fast forward 13 months and Narcissips is still going but O’Reilly is back working full-time with PwC, having joined the group’s sustainability and energy practice in Dubai.

Narcissips’ customer-facing product is a range of reusable water bottles and coffee cups but in the background is a broader social purpose, which is to educate consumers about sustainability. The third strand is philanthropic with 10 per cent of profits going to education and water charities.

“Initially, I had thought of Narcissips as a short-term project that would test my business experience as well as doing something positive for the environment,” says O’Reilly, who started the company with personal savings of €25,000. “But rather than slowing down, it gained traction and I took the time out to focus on giving it a good shot.”

What changed was O’Reilly’s desire to alter the balance between his life and career goals. This led him to consider how the business could be streamlined to run more efficiently on less of his time.

O’Reilly recognised that with some adjustments the business could continue to whirr away in the background and as he was also missing the interpersonal aspects of his previous role, he decided to return to consultancy and full-time employment.

“Basically, I really enjoyed the challenges of setting up the business but it’s not something I wanted to do for the rest of my life,” he says.

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