Could Web Summit be a unicorn?
IS the Web Summit a €1bn ‘unicorn’? That’s a question recently posited by one of Ireland’s more experienced tech industry stalwarts, Connor Murphy.
It’s impossible to know, because founder Paddy Cosgrave hasn’t taken significant external investment — the usual way for a company to declare its market valuation.
Cosgrave, who owns the company, says that he has twice turned down bids of €150m and €250m within the last five years. He adds that those bids were made at a time when the Web Summit was smaller than it is now.
Every year, most Irish commentary about the Web Summit centres around what it is or the utterances of its CEO founder.
But most of it misses the important details. Details that are apparent to anyone walking around the huge halls or mingling among the various executives.
What used to be stalls for small software companies and regional development authorities are now million-euro stands for Porsche, Airbus, Huawei, Amazon, Google, Lenovo and others.
Ultimately, this is really all that matters in measuring the business as a business. How many people will buy tickets? What kind of people are they? Why are they there? What companies feel they need to buy a presence there and how much will they pay?
On this last question, one detail from Paddy Cosgrave was revealing. I asked him why he had pulled the company’s Moneyconf financial technology event from Dublin earlier this year, just weeks before it was due to happen, to fold it back into the Web Summit in Lisbon.
The answer, he said, was that companies were willing to pay three times as much for a stand at the Web Summit as a standalone fintech conference.
Given that there seemed little problem in hosting and selling the Moneyconf event, that says a lot about the Web Summit’s commercial clout.
The last set of accounts for the company don’t suggest unicorn territory: €38m revenue and a €4m profit. But those are 2017 numbers. Given the huge growth of the firm’s Collision sister conference in Toronto and the clear upscaling in exhibitor investment at the Web Summit, it’s a reasonable bet that the numbers for 2019 will be substantially higher.
I know a bit about the scale of tech conferences as I’ve attended most of the biggest ones over the last decade. The massive events are CES in Las Vegas, IFA in Berlin and Mobile World Congress in Barcelona.
While the Web Summit isn’t at their scale yet (brands such as Samsung budget around €5m each for the stand and space at such events), it has closed the gap in an astonishing way. Its 70,000 attendance isn’t far short of the global elite events.
Remember too, that this conference is only nine years old compared to the 40, 50 or 60 year existence of its rivals.
One irony about the Web Summit is how likely you are to bump into Irish entrepreneurs, founders and tech executives that you might never see during the rest of the year.
“I come here literally to hang out,” one senior executive told me. “I know I’ll bump into a dozen people I’d like to talk to.”
Even as a journalist, this is the case. Forget about talks from Edward Snowden or Tony Blair. Linger in the mixed zones and you’ll catch up on the latest from Des Traynor, Bobby Healy, Nicola McClafferty, Alan Coleman, Brian Caulfield, Nikki Lannen, Jerry Kennelly, Eamon Leonard, Anna Scally, Ross Hunt and loads of others, including young guns like Evervault’s Shane Curran.
Aside from the gossip and who’s doing what, it’s impossible to attend and not deepen your understanding of what’s happening in tech back in Ireland. There simply isn’t an Irish conference that brings all of these Irish tech people together in the same way.
So back to the question of its value — is it worth €1bn?
Even though he owns most of the company, I’m not sure Paddy Cosgrave cares, other than as some sort of external validation for the conference’s existence.
He has commented a few times on the question of valuation over the last year, once in an open letter in June with the company’s financial results, and again at a pre-Web Summit press conference in Dublin last month.
He says he’s not bothered either way, that it’s somewhat irrelevant to what the Web Summit is about.
A cynic might raise an eyebrow at that type of response.
But Cosgrave isn’t a conventional capitalist. This is a man who chose living with housemates over a more conventional private home, even when the Web Summit was starting to make good money.
For all the heat he gets over motives around his utterances, it doesn’t look like personal wealth is top of his mind.
This assessment could be wrong. But much of his own personal enthusiasm at the Web Summit has been in developing talks with senior political and diplomatic officials (even when this results in controversy, such as the controversy over inviting and then disinviting Marine Le Pen in 2018). Tech is the oil in the Web Summit’s well, but policy appears to be its founder’s main passion.
All of that aside, the Web Summit will have to have a substantial valuation now, ranking as one of Ireland’s more prominent new exports of the last decade. It is still based here with 230 people.
Financially, it has little or no debt, with Cosgrave having foregone offers of external investment. And it has achieved the rare ability to move cities (and countries) without missing a beat. To any would-be external acquirer, this adds appeal, given that Cosgrave has demonstrated he can create competitive auctions between cities for his conferences.
Ireland only has one home-grown ‘unicorn’ at present: the customer service software firm Intercom.
I suspect that in the next five years, we’ll see another couple of unicorns emerge. And if it continues on the path that it’s going, the Web Summit is likely to be one of them.
TECHNOLOGY