Almost three-quarters of local Irish technology companies grew their revenue last year, according to new research from Bank of Ireland and Trinity College Dublin.

The research project, led by Professor Brian Lucey at Trinity College, was conducted with 100 indigenous SME technology companies and will be presented at Bank of Ireland’s Technology Sector Insights briefing today (13 November). The objective of the research was to look at the revenue performance and funding choices of Irish technology companies.

More than half (54pc) of the companies said that they were profitable.

Exploring the most important area of their businesses for investment, 49pc said sales and marketing, 30pc said technical staff, and 22pc said that their main focus would be on research and development activities.

It’s time to scale up local tech businesses

When asked about the most important objective in the next two years, 35pc of companies said that growing headline revenue was the focus, one in four (25pc) said they want to increase profits, while the same number (25pc) said they wished to introduce a new product or service. Approximately one in 10 (8pc) want to break into a new market and the same number (8pc) want to diversify into a new business area.

In terms of the main long-term goal, almost half of technology companies (45pc) said that their objective is to generate high profits each year, with one in four (23pc) hoping to be bought out within five years and 8pc wanting to merge with another firm. 5pc wish to acquire another firm, with 5pc wanting to embark on an IPO.

“There is significant momentum in revenue growth for this business cohort, with seven in 10 increasing revenue last year, up from six in 10 in similar research we conducted in conjunction with UCC in 2014,” said Mark Cunningham, director of Business Banking at Bank of Ireland.

“We’re also seeing a mature expansion strategy from SMEs, prioritising investment in the sales and marketing function in an effort to expand into new markets.

“Evidence is emerging of organisations who may have postponed investment decisions now spending significantly in technology, so it’s an opportune time for these SMEs to scale,” Cunningham said.

Specifically, Cunningham pointed to financing made possible under the InnovFin agreement to encourage businesses to start investing in order to scale up.

The InnovFin agreement allows Bank of Ireland to provide finance to innovative companies in Ireland for a total of €100m over the next two years with the support of a guarantee provided by the European Investment Fund and backed under Horizon 2020, the EU Framework Programme for Research and Innovation.

Bank of Ireland has completed funding for a broad range of technology companies this year including Version 1, Phorest, S3Group, MicksGarage and Milner Browne.

The bank also recently launched a new incubator programme for tech start-ups in Galway – StartLab – designed to support the tech start-up community in Galway city and the surrounding region.