How Ireland is helping companies stay safe – and providing investment opportunities
The need to keep your business safe from online criminals has never been more important, and Irish businesses are on the cutting edge of the fight against cybercrime.
As long as businesses use computers, bad actors are out there looking to hack into networks– and the threat is getting bigger with each passing year.
Indeed, with more businesses now trading online the effects of a cybersecurity attack can be devastating. Not just in lost trade while the website is down, but also in the loss of trust among customers afterwards, especially if customer data such as bank details are taken. For a small to medium-sized company, the effect of a cyberattack can prove fatal.
Furthermore, cybersecurity has become more critical with the growth in home working during the past year due to the Covid-19 pandemic. Many remote workers will not necessarily have the same security on their office devices and businesses will need to invest in solutions that cover all possible attack areas.
As a result, cybersecurity is one of the biggest concerns for CEOs, according to a recent report by insurer and consulting firm Marsh & McLennan Companies Inc last November. [www.reuters.com/article/events-insurance-cyber-idUSL1N2I21WO] Indeed, some surveys have reported that more than half of businesses have suffered a cyberattack of some description in the past year, so the importance of cyber security cannot be underestimated.
Ireland as cybersecurity hub
Nevertheless, Irish businesses have a wide range of cybersecurity providers available; indeed, the country is a global hub for the cybersecurity sector. Not only do the majority of the 50 leading cybersecurity companies in the world have an office in Ireland, including Sophos, there are also a number of home-grown businesses too.
The sector employs about 6,000 people in Ireland, and cybersecurity exports grew by 25% in 2019, an upward trend that is expected to continue in the coming years.
That Ireland is a leading cybersecurity nation should be of little surprise. Ireland has long been home to innovative software companies – most of the leading players have a base in Ireland – so it follows that the businesses that provide the security for them would grow up around them.
With such a cluster of businesses in Ireland, and the growing importance of the sector, it is natural that Irish cybersecurity firms were active in M&A during the past year, despite the Covid-19 pandemic. For instance, one of the biggest deals came in April when Dublin-based Accenture acquired Symantec’s cyber security services business from Broadcom, which employs some 300 people across the world. The deal also included Symantec’s global threat monitoring and analysis business, which has operations in the US, UK and Australia, among others.
The deal came six months after Broadcom bought Symantec’s enterprise security business, which included the cyber security services business, for $10.7 billion.
Deals also occurred at the smaller end of the market too. In July, telecoms company Welltel bought Kildare-based cybersecurity firm Novi for €3 million.
Novi, which provides managed cybersecurity services through various products, has also developed services to enable secure remote working, which, as mentioned, has become a priority in the past year.
Dublin-based Welltel now plans to grow its cybersecurity offering with Novi’s technology and develop new market opportunities.
Irish cybersecurity businesses have also proved attractive to investors in the past year. For instance, last June Irish growth capital investor BGF paid €10.5 million for a minority stake in Dublin-based cybersecurity business Edges can.
Edgescan, which employs 57 people, develops proprietary SaaS [software as a service] products to spot vulnerabilities in a business’ networks, website and cloud – its customers include leading companies in sectors as diverse as entertainment and healthcare. The company also scooped the Best Vulnerability Management Solution provider award in the SC Awards Europe 2020.
BGF’s investment will be used to quicken Edgescan’s international growth and for new product development, as the company aims to continue its rapid growth of recent years.
Why invest in Irish cybersecurity companies
With all this activity there is clearly an appetite for Irish cybersecurity companies – and there are plenty of reasons to invest in them.
For instance, the Irish government and state bodies are also prominent backers of the sector. In 2019, the National Cybersecurity Strategy [www.ncsc.gov.ie/pdfs/National_Cyber_Security_Strategy.pdf], a five-year government strategy, was launched, which sets out how Ireland will tackle the challenges of digital integration and develop the cyber security sector and enhance the security of the nation.
In addition, Science Foundation Ireland, the national foundation for investing in scientific and engineering research, has funded research into cybersecurity in recent years. It was also announced at the beginning of February that the State is going to invest €193 million over the next six years into research into a range of technology-focused sectors, including cybersecurity.
The investment will be in five Science Foundation Ireland research centres and will look to cement Ireland’s status as a world leader in research and innovation.
Research and development centres in several Irish universities are also putting resources into developing new ways of combatting cybercrime, including using technology like artificial intelligence.
In addition, there is a pool of experienced and highly qualified talent in Ireland. With the prevalence of software and tech companies in Ireland, a large workforce already exists m in the sector. In addition, there are four undergraduate degree courses in cybersecurity at Irish universities and eight postgraduate degree courses; each year there are newly qualified people coming into the workforce.
Elsewhere, there is a project, Cyber-Skills, which aims to create new cybersecurity courses in Ireland through collaborations with businesses or research and facilitate new learning pathways. It was given €8.1 million under the Higher Education Authority Human Capital Initiative Pillar 3 scheme last year.
Facilities are also available for start-ups in incubation facilities, which give extra support to new cybersecurity companies.
Ireland is also one of the leading EU nations in terms of digital take-up and, significantly, is now the only native English-speaking nation in the bloc, following the UK’s departure. This makes it attractive for inward investors, especially from the UK, US and Canada. Perhaps more significantly, Ireland offers access to the single market and frictionless trade with the other 26 members of the, which makes exporting to those countries easier than for those outside of it.
Growth to come
As cybersecurity becomes an increasing concern for CEOs of companies of all sizes, the cybersecurity sector in Ireland looks set for solid growth for some years to come.
With emerging technologies such as artificial intelligence set to revolutionise the industry in the coming years, and the Irish state along with cybersecurity businesses investing in research to stay at the cutting edge, the sector a good investment prospect for investors from within and without Ireland.
For those looking to set up a cybersecurity business in Ireland, invest in or acquire an existing company, then it is crucial to get the right advice.
Those looking to invest or buy should seek out advisers with specialist knowledge of the sector in Ireland – including its history and leading players. Malone & Co Accountants can assist on all the relevant aspects from setting up a company to providing diligence services as part of an M&A deal or funding round in the sector. We can also provide in-depth information to ensure any deal achieves the value hoped for at the outset. Remember, while Ireland may share a land border with the UK, the regulatory regimes can be quite different, which can trip up unwary investors.