Three top executives of Waystone, the Dublin-headquartered financial services group, who left the organisation in 2023, have launched a new investment venture to invest in Irish fintech firms. DataOps has already provided 17.5 million euros in investment to a number of firms with further deals to close shortly.
The rationale behind the investment vehicle is that there is a deep pool of innovators in Ireland that are constrained in achieving their potential due to a lack of available funding through the venture capital and private equity markets.
Derek Delaney, who formerly led Waystone and who departed along with its then chief financial officer Glen McGee, and chief operating officer Paul Cahill last year, are behind DataOps which is a sister investment vehicle to ComOp, an agri-tech businesses investor.
Among those firms to secure funding via DataOp are FundRecs, a company that has developed cloud-based reconciliation software, and ID-Pal, an identity verification provider. Delaney said DataOp was founded to provide funding to early-stage companies that might otherwise struggle to secure funding.
He said: “We were very much focused on ComOp and are currently in discussion with two national governments about the creation of carbon credit exchanges. But it is a very nascent business and so while we have been working on it, we have been getting approached by lots of Irish early-stage firms which are struggling to raise from a VC market that has largely dried up.”
He added: “This led us to decide to look at having a separate investment vehicle to run alongside ComOp that is focused on investing on early-stage fintech and data ops firms that are stuck for expansionary capital.” Delaney and DataOp will write cheques from one million euros upwards with four deals closed to date and a further three due to complete shortly.
He said: “Typically, these businesses would get investment easy enough but the VC market is against them at the moment. In such a situation, the options open to them are to cut back on staff but this is the exact optimal time for them to be expanding so it is great for us to come in and back them.” He further said: “Overall, we have our own capital up to about 40 million euros and also have soft commitments for an additional 100 million from other investors should we wish to avail of it. We won’t invest less than one million in a company and the biggest deal we have done to date is 7 million euros.”
Alan Meaney, co-founder and chief executive of Fund Recs, said DataOP “immediately added value to the business” when it invested in late 2023. “They’ve challenged our ambition for the business in a positive way and provided pragmatic, no-nonsense advice since investing. It’s encouraging to see people of their calibre reinvest a significant portion of their net worth after a successful exit back into Irish companies,” he said.
Meaney added: “Hopefully, it’s an example we can follow ourselves if we can achieve similar levels of success. We don’t see enough of this type of reinvestment by successful Irish founders who could have a much bigger impact doing similar instead of investing in rent-seeking investments like property. I’m hopeful their success can kickstart a wider trend.”
There was considerable surprise when Delaney, McGee and Cahill departed Waystone in 2023. Formed as a merger between two Dublin-headquartered companies – MontLake and DMS and MDO, a Luxembourg-based UCITS management firm and alternative investment fund management – it had grown rapidly under Delaney’s management. At the time of Delaney’s departure, it was serving clients with assets under management totalling more than $2 trillion. (The writer is our foreign correspondent based in the UK)
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