It could be dubbed the digital trickle-down effect. After all, the tech world loves a catchphrase. And Ireland has a history of providing a steady flow of start-ups after establishing itself in a particular sector.
Take elearning. The Republic has a strong heritage in this area with a host of companies having been started by people who previously worked for early trailblazers such as CBT Systems, Riverdeep, Intuition Publishing and WBT Systems.
According to recent figures, Enterprise Ireland currently has more than 60 client companies on its books at different stages of development operating in the education technology sector. In total these companies employ more than 500 people and reported sales of €168 million in 2017.
At the last count there were more than 4 million active users on the LearnUpon platform
Among the new cohort of companies to emerge from WBT alone are digital exam management and invigilation service TestReach, mobile microlearning platform QStream and LearnUpon, which was recently named Company of the Year at the Technology Ireland awards.
While hardly a household name, Dublin-based LearnUpon is busy carving out a reputation in what is an extremely crowded but lucrative industry segment.
The company has developed a popular cloud-based learning management system (LMS) that is used by more than 1,000 companies to deliver online training to their employees, customers, partners and resellers. Clients include Tripadvisor, Twilio, PSA's Vauxhall subsidiary, Yokohama, SmartBear and Intuit Quickbooks. At the last count there were more than 4 million active users on the LearnUpon platform.
Founded in 2012 by Brendan Noud and Des Anderson, LearnUpon is headquartered in Dublin and has offices in Belgrade, Sydney and Philadelphia. Having started as a two-man operation, it now employs more than 70 people and expects to take on an additional 50 over the coming months.
In the most recent Deloitte Ireland Fast 50 rankings, which lists the top local tech companies based on revenues, LearnUpon was ranked in sixth place
“The number of companies that have come from the likes of WBT provides evidence of a full elearning ecosystem here,” says Noud.
“Irish companies’ success in the space gives you credibility when going international but it also gives you the confidence to think globally from day one. Take us for example, our first 14 customers were all from outside Ireland and about 95 per cent of our business is abroad,” he adds.
Given the focus on overseas markets, it isn’t perhaps too surprising that LearnUpon is not well-known locally. But this is beginning to change as the company founders raise their head above the parapet.
“Part of the focus over the last 12 to 18 months has been on getting the company better known, so we’ve been going in for awards and doing a bit more media than in previous years. The main reason for this is that we’re obviously in competition with big Software-As-A-Service (Saas) companies such as Zendesk and New Relic for staff,” says Noud.
As well as taking home the top prize at the Technology Ireland awards, Learnupon has been a regular on the Deloitte Ireland Fast 50 rankings, which lists the top local tech companies based on revenues. In the most recent list it was ranked in sixth place.
LearnUpon has largely been self-funded to date, having raised a total €1.25 million in seed investment
The company is forecasting revenues of about €15 million for its next financial year but has big ambitions with an aim to become a €100-million business within five to six years.
“We’ve been consistently growing at 60 to 70 per cent year-on-year and we think given the scale we have and the resources we can accelerate growth,” says Noud.
“The product is continually getting better, the brand is getting stronger and we’re pretty confident we can reach our target,” he adds.
LearnUpon has largely been self-funded to date, having raised a total €1.25 million in seed investment from angel investors, Enterprise Ireland and the National Digital Research Centre. The company isn’t ruling out taking on external investment at some point as it continues to scale. Noud makes it clear however that it is hoping to avoid doing so for as long as possible, if at all.
“There is a lot of interest in the company and we could raise a lot of money whenever we want, but our growth is so strong and is customer funded, and we’re not going for hypergrowth, we’re keeping things really tight and, over the next few years at least, I don’t think we’ll need to look for external funding,” he says.
'Initially, Des and I offered 24/7 support between us... we wanted to be known for our great support, so prioritised that'
The sector in which LearnUpon is operating is a crowded field with Noud estimating there are many hundreds of companies working in the space. It is however a lucrative one, and he estimates it to be a billion-dollar industry.
Noud and Anderson hit upon the idea of starting LearnUpon when they considered just how poorly most LMS systems were back in 2012. At that point, Anderson was working as a solutions architect at WBT while Noud was in sales. While WBT was focused on larger vendors and on installs rather than cloud-based solutions, the entrepreneurs gained a lot of exposure to the sector and plenty of insights into what did and didn’t work.
“We are in a crowded space with maybe 500 to 600 competitors in LMS but even at the start we had big ambitions because we could see there was an opportunity as most of the solutions at the top of the market were limited in so many ways with support, in particular, notoriously bad,” he says.
“You’d struggle before LearnUpon to find a company that would focus properly on support. We took the opposite approach though. Initially, Des and I offered 24/7 support between us until we got to the point where we had enough paying customers that we could take someone on. Most competitors would have probably taken on someone in sales of marketing or another software developer but we wanted to be known for our great support, so prioritised that,” adds Noud.
'For the most part we're competing with publicly quoted million-dollar companies or heavily funded private-equity-backed firms, so it is a bit of a David-and-Goliath situation'
The entrepreneurs carved out an initial niche for themselves by branding the company as the LMS that training companies would use, but it has since expanded to the point where many of its customers have multiple-use cases for LearnUpon’s platform.
“We’ve seen a lot of growth in the software space with companies such as SmartBear and Twilio using the product to train their own employees but also for use to show customers how to use their solutions. The result has been higher engagement, reduced churn and lower support overheads, so it is an obvious return on investment,” says Noud.
He said that in the space of six years the company has become internationally recognised as one of the top three or four cloud-base LMS providers. Key competitors for the company include Litmos, now part of SAP, and the Italian company Docebo.
“For the most part we’re competing with publicly quoted million-dollar companies or heavily funded private-equity-backed firms, so it is a bit of a David-and-Goliath situation where we’re taking on the big guys and beating them,” says Noud.
The businessman said part of the company’s reluctance to take on external funding is due to watching so many competitors struggle after scaling too fast.
“Some rivals have raised $70 million to $80 million and quickly gone from, say, 100 people to 300 in a year, but I don’t think you can continue to offer the same kind of quality when you do that. We’re also obviously looking to scale but are very aware of the pitfalls and are doing what we can to prepare for them ahead of time,” says Noud.
“We’re very much US-focused with about 65 per cent of our business there and that isn’t going to change in the near future. We opened an office in Philadelphia in 2017 and have 8 or 9 people on the ground which will grow to over 20 by the end of this year. It’s our biggest market but we’re still at the tip of the iceberg there with plenty of growth potential. We also have a strong brand in the UK and it will be those two markets that continue to be our main focus over the next few years,” he adds.
