Start-up Nation: Sharing of services provides solid base
Business was set up with the aim of building a significant-sized technology group headquartered in Ireland
Alan Phelan: “I found most start-ups had limited management experience and were generally selling out very early to multinationals. As a result, Ireland is not ending up with enough technology companies of a decent size.”
In 2005, Carrick-on-Shannon born Alan Phelan and his business partner, Seán McKeague, sold their UK-based telecommunications company for £20.7 million. Three years later, with the ownership transfer complete, Phelan returned to Ireland to start a new business.
“I had no real plan,” he says. “I wanted to look at what was happening, particularly in technology start-ups, to see what route we might take.”
Phelan looked at 120 business ideas over two years while based in the incubation centre at NUI Galway. “The key evaluation criteria were: does the technology really work? If so, is there a market for it and is that market big enough?
“We’re not interested in something that could generate maybe a million but not much more. As a result a lot of ideas fell by the wayside,” Phelan says.
In 2010, the partners set up the Nucleus VP Group with the aim of building a significant-sized technology group headquartered in Ireland.
Phelan is impressed by the US-based Idealab which accelerates technology innovation by providing early-stage companies with a growth infrastructure.
Nucleus VP will be similar, with the focus on software, telecoms and waste-to-energy technology. Group companies will share services such as finance, planning, IT, HR and marketing.
“When I returned to Ireland I found most start-ups had limited management experience and were generally selling out very early to multinationals,” Phelan says.
“As a result, Ireland is not ending up with enough technology companies of a decent size. It would be great to see more Irish companies IPO, but if anything, this is getting more difficult as the revenue level required is increasing rather than decreasing.”
Phelan graduated in engineering from NUI Galway in 1990 and moved to the UK where he worked for a large engineering group (now BAM) until 1997.
“I met Seán (who later became my business partner) when I joined his company to lead its projects division. I subsequently became a director and shareholder and then managing director and we grew the business to a £25 million turnover.”
Nucleus VP’s first investment was in satellite telecoms provider Onwave, which was set up in Ireland in 2008 and acquired by NucleusVP in 2011. It is has offices in Mullingar and Britain.
“In Ireland, Onwave concentrates on satellite telecoms. In the UK our next generation offering is ‘hybrid’ – a portfolio of solutions in a single managed box that allows customers harness the potential of ADSL, fibre and EFM, Satellite and 4G to dramatically increase the quality and quantity of connectivity.”