Former Waystone trio set up agri-tech venture capital and plan carbon credits exchange

Three top executives who quit Waystone, the Dublin-based fund services giant, three months ago have set up an agri-tech venture capital (VC) firm and are looking at establishing a carbon credits exchange based on blockchain technology.

Waystone said in March that its chief executive, Derek Delaney, chief financial officer Glen McGee, and chief operating officer Paul Cahill had left the company, in a move that surprised many in Dublin’s financial circle, given the pace at which the business had been growing in recent times.

The trio have gone on to set up a business called COMOP, with a VC arm focused on investing in agri-tech businesses that are seeking to improve the use of commodities and resources.

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Mr Delaney told The Irish Times that this unit has lined up €20 million-€25 million of initial funding commitments, with about half coming from the three co-founders. The team has rolled into the venture a minority stake they bought earlier this year in Proveye, a University College Dublin spin-out whose software is used by agricultural advisors, fertiliser and pesticide suppliers to provide information about productivity and sustainability on land to farmers.

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Two other investments are also in the immediate pipeline, Mr Delaney said, declining to give more details.

“Agri-tech is probably the least sexy tech area. But we’re trying to find Irish companies that we feel are able to make a difference in terms of use of commodities, as we are increasingly seeing scarcity of resources like water, nitrates, and phosphates,” said Mr Delaney.

COMOP is also looking at projects using technologies focused on reducing carbon in the atmosphere, with the aim of creating carbon credits that can be traded, he said. The ultimate ambition is to set up a carbon credit exchange, based on a blockchain ledger for the registration and tracing of carbon credits for ownership and determining market prices.

“The use of blockchain technology is important as it will ensure that there is no double counting of carbon credits,” he said.

Waystone was formed in 2021 by the three-way merger of peers DMS Group, where Mr Delaney was chief executive, MontLake and MDO to create a leading global governance, compliance and third-party management company for the assets management industry. It services more than $2 trillion of assets under management.

[ Waystone seeks occupier for space at its new Dublin 4 headquarter offices ]

[ Waystone signs for new headquarter offices at 35 Shelbourne Road ]

Private equity firms Montagu and HG Capital each bought a majority stake in the business last year in separate deals, with the latter reported at the time to put $1.3 billion enterprise value on Waystone, including debt.

A subsequent string of acquisitions by Waystone, including an agreement reached last month to buy the Irish and UK fund solutions business of Australia’s Link Administration Holdings, is likely to leave the group valued at more than $3 billion, according to industry observers.

Mr Delaney, Mr McGee and Mr Cahill have been allowed to remain as shareholders in the business. However, Mr Delaney declined to disclose their holding.

Industry sources said at the time of the departures that they occurred amid differing views on future direction of the group, with the private equity owners said to have been keen to keep Waystone on the path of rapid deal-making. The company appointed its chairwoman, Nancy Lewis, as the interim top executive in March.

“We’re grateful to Waystone, the board and investors for facilitating our exit to pursue [the setting up of COMOP],” said Mr Delaney. “We are doing something we feel is very beneficial for the world but also value creative.”