From a small office in Dublin, located in a mews just off Merrion Square, a hand-picked team of corporate financiers is deploying capital at a pace almost unheard of in Irish business. They work for CastleGate Investments, a company with lots of money to spend and to spend quickly. The funds are being deployed in a wide range of directions, from outright acquisitions to minority holdings in start-ups to stakes in publicly traded companies.

In recent days, it was the turn of Danu Sports, a wearable sports analytics technology business. CastleGate Investments led a €3.5 million funding round in the firm, allowing it to hire ten more staff and break into even more new markets. As a sign of intent, and commitment, CastleGate is nominating two directors to the Danu board. One of those will be Jason Crawford, the Dutch-based “global vice president of hype” with the sportswear behemoth Adidas.

Before Danu, it was an investment in fast-growing Irish cosmetic brand Kash Beauty and participation in a €17 million finance round in Irish athleisure brand Gym+Coffee (a company also backed by the pop star Niall Horan). CastleGate has also backed Ronan Murphy’s cloud security company CWSI, as part of a wider deal that saw it acquire a Dutch rival.

All this and then the acquisition of Sherry Fitzgerald, the country’s largest estate agency for a reported €50 million, a deal that saw the investment house gain control of one of the biggest names in property with a nationwide reach.

The list goes on. And on. In November, it put €30 million into a major fund run by listed venture capital firm Molten Ventures as part of a syndication deal that increased the firepower of Molten’s €150 million seed and early-stage fund of funds. It also made CastleGate an influential anchor investor for future transactions, and a participant in historic deals. There have been forays into the stock market also, with relatively small stakes in HealthBeacon, a health and technology company listed on the Irish stock exchange, as well as a stake in the publicly traded house builder Cairn Homes.

The orchestrator of these deals is Roy Barrett, a former head of Goodbody Stockbrokers who was parachuted in by the government to restore order to an embattled and divided Football Association of Ireland as its independent chairman. Announcing his departure in January, he cited the need for more women on the board.

Backed by a small team, Barrett assesses the multitude of deals that are introduced to CastleGate with increasing regularity. The organisation works like a well-tuned orchestra, never missing a beat in its search for opportunity. No one is entirely sure how much CastleGate has to spend, but the word in financial circles is that they have an initial €500 million to deploy.

If Barrett is the leader of this orchestra, Tommy Kelly is the conductor and, importantly, the money man.

Kelly is a man who seamlessly moved from a farming background to e-commerce, trading in more than 200 countries and is now probably the richest man in Ireland. No one is quite sure how much Kelly is worth, but it is in the region of €1 billion, potentially higher. There may be richer Irish people, although many on the Rich List are tax residents elsewhere and few have access to the kind of liquid wealth that Kelly has at his immediate command.

He sold up, went again and built something bigger

By his own admission, he could have retired back in 2006 when he sold his first business. He went again and built something even bigger, something even more global, something even more successful. And he sold that too. For far more money. So, with vast sums in his vault, he recruited Barrett and tasked him with creating a family office from scratch. Since then, the deals have come thick and fast.

Looking for investment? Send your pitch deck to CastleGate. Looking to sell? Call Roy Barrett.

Kelly’s money has the potential to change the deal landscape in Ireland, although he happily acknowledges that he has brought in experts to pick the deals. He says investing in funds, businesses, and start-ups is not his area of expertise.

So, just what is his area of expertise? How did a man who once thought he would spend his life on a farm end up with such colossal wealth? And what is the strategy behind its deployment?

This is the story of Tommy Kelly; how he made a fortune, and how he intends to spend it.

From a North Dublin farm to international boardrooms

Tommy Kelly is sitting in his office at the headquarters of ESW, formerly eShopWorld. It is approaching 24 months since Kelly sold his remaining 49 per cent stake in the e-commerce giant to Asendia, a joint venture between La Poste group and Swiss Post, a deal that propelled him to the upper echelons of the annual rich lists. He has remained in situ as chief executive of the business, determined to propel it forward, and, with some decent tailwinds, float it on the stock market.

The numbers are striking. In November, the company said its turnover for the year to the end of December 2021 rose by 28 per cent to €1.24 billion, pointing to strong growth across all its markets. Profits before tax fell by 9.8 per cent to €22.9 million due to investments in its workforce and its e-commerce platform to support its future growth, according to a statement from the company.

Total headcount by the end of 2021 exceeded 620, an increase of more than 200 people since January 2020. This was partly due to the e-commerce bounce during the pandemic. The company helps big international fashion brands such as Nike, Victoria’s Secret, and Calvin Klein sell to international markets online, and, during the lockdown, some of its brands experienced sales increases of up to 400 per cent. However, while other e-commerce retailers experienced a slowdown when the economy reopened, ESW has continued to thrive.

Last year, it acquired e-commerce-as-a-service solutions provider Scalefast for a fee reported to be in the region of €300 million. It was a deal that largely flew under the radar but still ranked as one of the biggest transactions involving an Irish business last year.

It was about getting it right and the success would follow

Over coffee in his office, Kelly explains that the company has about 1,200 people in the organisation at present and that turnover should increase this year to more than €2 billion.

The next target, he admits, will be €5 billion. “We are always looking at the next target,” he says.

Before that happens, however, the company might list on the stock market. Last year, 12 months after Kelly sold his remaining 49 per cent stake, it was widely reported that ESW was poised for a $4 billion (€3.65 billion) stock market flotation, a figure that gives a sense of the value of Kelly’s stake.

Bloomberg reported in May that Asendia had hired advisers Lazard and was examining a listing on the Amsterdam stock market as early as the second half of 2022. Bank of America, Société Générale and UBS Group were lined up as global coordinators for the listing.

The tech slump and global market wobbles derailed the listing, for now at least.

“A floatation is on the cards for sure, it’s about when,” Kelly admits candidly over a lengthy interview at the company’s headquarters just outside the north Dublin village of Swords, inside a building that is also the nerve centre for Ryanair and located a short distance from the farm that Kelly grew up on.

Kelly’s office is emblematic of the wider ESW headquarters. It is small, tasteful, and extremely tidy. Everything has a place and there is a place for everything. There are a few personal items relating to Kelly’s past, a scattering of pictures, a model of a truck bearing the words TwoWay, a nod to the previous company that Kelly launched, built, and sold. There is an award or two.

In person, Kelly manages to be both charismatic and personable. He is patient, inquisitive, and even offers me a lift back into the city centre when the interview ends.

Kelly has sold two companies to multinationals and has remained with each of them after the sale. So, he carries the air of a man who is both executive and entrepreneurial. One person who has worked with him says that while Kelly learned the corporate patter from multinational boardrooms, his underlying worldview stems from his own personal experiences as an entrepreneur.

During the interview, he explains that he never chased wealth, and that wealth has not changed his own lifestyle. Instead, he has sought to build businesses that chase excellence, and that profit follows the pursuit of that excellence.

Likewise, he shrugs off any notion that his lack of formal business qualifications drove him in some way. He left school after his Intermediate cert to attend agricultural college and believes that being an outsider in business just helps him see things differently. “If you grow up in an industry you have preconceptions,” he says. “I don’t grow up in logistics or tech. We have always sought to be a disruptor.”

It also made him understand what he was good at, and what he was not. “It’s a bit of a cliché but I knew nothing about tech. So, what do you do? You employ good people, right? Common sense is not overly plentiful in industry. So, it pays to employ good people,” he says.

“I tend to employ good people. I pay them well. This business in its early days had a very attractive incentive plan for people. We were a €300 million business, but we were employing people who had previously run a billion-dollar business. I’m a delegator. It’s a cliché but I am.”

The same applies to his approach to CastleGate, his family office: “Know what you are good at. I would never delude myself that I am a good investor or have a background in it or a history in it. Bring in the right people.”

Throughout the interview, he speaks openly. Unlike many of his peers, there is no aide or a PR adviser in the room during interviews. He deals with everything from the fear of failure to his wider concerns about the housing crisis on so many young people. He talks about entrepreneurship: If you are satisfied with the norm, you shouldn’t be working for yourself, he says.

And he talks openly about the experiences that shaped him, for better or for worse. Overall, however, he makes the journey of how he built a billion-dollar business from the ground up seem remarkably straightforward, as if it is something that anyone could achieve.

The reality, however, is anything but.

He stumbled across the future

It began in a portacabin. Having studied at Multyfarnham Agricultural College in Co Westmeath, Kelly assumed he would end up farming land and, in fact, he still keeps a farm in North Dublin.

A friend bought a truck and trailer, before asking Kelly and Kelly’s brother to get involved. They began in a portacabin in 1986 and this became the genesis of TwoWay Vanguard, a business established with the support of the financier and Airtricity founding director Louis Fitzgerald.

The company turned over £100,000 in revenue in its first year. Within 12 years, revenues had topped £35 million, and it had expanded into a 90,000 sq ft combined office, warehousing and logistics facility behind Dublin Airport. Over that time, it had evolved from freight into logistics, organising the movement of goods all over the world on behalf of blue-chip clients such as Dell, Creative Labs and IBM.

When the journalist Charlie Weston interviewed Kelly in 1999 for a profile in The Irish Independent, he asked if a sale of the business was on the cards. The answer was clear: “We are getting plenty of knocks on the door, but the time would not be right because we are in expansion mode. But we will probably need a multinational partner if we continue to grow at the same rate.”

However, by 2006, the time was right. TwoWay was operating from 15 offices in international centres, generating sales of $85 million, and was snapped up Dubai- based Aramex.

However, looking back now, Kelly acknowledges that the company nearly collapsed along the way.

“It nearly failed a few times,” he says. “A few times with TwoWay, I nearly had to close the door for overtrading or whatever.”

He adds: “TwoWay wasn’t an instant success, it wasn’t like – bang, it went quite quickly. It was nearly 20 years in the making, until we sold it. But I suppose the other thing, which was quite helpful was that I hadn’t come from the industry.”

The business, he says, succeeded by being a disruptor.

“Tech was a key attribute to that,” he says, explaining that the company benefitted from the tech boom in 1990s Ireland.

“It was a good time in Ireland when you had the Dells, the ASTs, the 3Com, and whatever. And so, they wanted a level of innovation. We were a small Irish trucking business across UK and Ireland but we set up a footprint in Holland and we set up a footprint in other places. We went into air also.

“We got out of our comfort zone,” Kelly explains.

I ask what drove him to leave that comfort zone. “I have an obsession with what’s next? I am always asking: what’s next? We even had offices in China,” he says.

He expands upon this point later in the interview: “The trucking business was a very honest business. It became a logistics business and was international and overseas, but it’s a very honest business, very traditional. In fairness, we were very successful at it. We were one of Ireland’s top independents. I won’t say it was hard earned, but it was very honestly earned.”

After the sale, Kelly stayed on at Aramex, serving as CEO of the business in Europe and North America.

It was a positive result. Kelly acknowledges he could have retired from the proceeds of the sale, before quickly adding that it was never just about money. “I could have stopped. We sold for a lot of money. I had enough to have a comfortable life and do what I wanted. But it was not what I chose to do,” he says.

So, he remained in situ and learned the cut and thrust of the boardroom. A man who had been self-employed for all but a few ill-fated months in his teens was now both managing up and managing down.

However, within a number of years, Kelly was getting the entrepreneurial itch. He had spotted an opportunity, one that would lay the foundations for ESW.

The company was incorporated in 2010, although Kelly did not join full-time until four years later.

By then, Kelly knew he might just have stumbled across the future.

He walked into Nike. It was like Disneyland

It is 2014 and Tommy Kelly feels that he has just entered Disneyland. It is four years since he established eShopWorld with two US friends, and he has just arrived full-time after leaving Amarex. He believes that the business is on the cusp of something. Asendia has taken a 10 per cent stake, something that has given the business international clout and a credible calling card. The business has convinced a number of major retailers to come on board, but Kelly knows that he needs a big one, a statement client, to really propel it forward. He wants Nike, a company he believed set a standard in all retailing, both in-store and online. So, he heads to the multinational’s Oregon campus to pitch his service.

“It was like walking into Disneyland, a completely different experience,” he recalls.

Nike said yes. The following year, eShopWorld launched Nike online in 27 countries. “It was a gamechanger. That elevated us. Not only were we able to say that we were representing a brand like Nike, but you are also creating an experience that is always leading edge,” he says.

The trip to Disneyland had worked.

The plan expanded to more than 200 countries

The way Tommy Kelly tells it, he was simply trying to solve a problem. Back in 2010, he says online shopping was a “blunt experience with lots of pain points”. People in Europe were encountering serious agitation buying from US brands online, while US brands were experiencing similar agitation shipping to them. There were issues over zip codes, customs regulations, and payment methods.

“It is a funny thing to say, but we were not totally financially or profit motivated”

He was witnessing it first hand at Aramex, which had an operation called Shop and Ship. It was effectively a service that disguised foreign shoppers as being US-based through the use of a mailbox. However, brands did not like it as they felt the operation was encroaching on their business while shoppers were getting a bad experience. “It was a double-edged sword,” Kelly says.

So, he began chatting to brands about what might work, and then he began talking to the Irish tax authority about positioning Ireland as a gateway for US brands into Europe.

His idea was that eShopWorld would be agnostic; the business would do the heavy lifting for the brands in the background, while customers assumed they were dealing directly with the brand. It was a strategy that allowed Kelly’s business to work with multiple leading brands simultaneously. As Kelly told The Sunday Times in 2020: “We are here to take famous brands globally, not to make brands famous globally.” Along the way the proposition evolved. Today, rebranded as ESW, the company does everything from the brand website to compliance and logistics to language localisation to payments to customer service and returns. It is an end-to-end service that Kelly explains covers 95 per cent of the whole customer experience.

It is facilitating global retail across 200 countries, but as Kelly puts it, doing it in the background. “We are empowering brands,” he says, adding that he interacts with more than 100 vendors such as cybersecurity firms and payment businesses as well as developing its own technology.

The concept is attractive for brands keen to offload the logistics. In 2021 for example, DKNY, Charlotte Tilbury, BCBG, Aspinal of London, and The Webster all came on board as clients.

To get to this point, however, Kelly had to overcome significant obstacles, including getting clients to believe in the concept in the first place.

“It is hard getting that first customer. Remember, in our business, we had the money before they had it, so it was not that they owed us money. You could owe a retailer a million bucks in a week. That is a real dilemma for them. That requires trust,” he says.

I ask Kelly if his background selling TwoWay to Aramex and his subsequent stint in the corporate world made it any easier. “Yea, we had done the sale and you have been there before, and that was important to get the initial two or three brands to trade with us,” he says. “Then we took Asendia on as a shareholder; its two parents, Swiss Post, and French La Poste were very referenceable as a shareholder.

 “You take about inflection points. We started trading in a meaningful way in 2012, but then, well, Nike.”

Welcome to Disneyland.

The plan: Chase excellence not profit

If the story of TwoWay was one of incremental growth, the rise of ESW has been stratospheric. With more and more brands keen to exploit online sales, the Dublin company was well poised to help them. As the numbers grew, so too did Asendia’s stake, and by 2017, it had taken a 50.1 per cent holding with Kelly holding the rest. By 2019, sales had hit €564 million. To put this in perspective, this was a ninefold increase on 2016 figures. By 2020, it was nearing the €1 billion figure, something it surpassed in 2021. This year, Kelly says it will top €2 billion.

The pandemic has helped, something that Kelly acknowledges. But he is at pains to stress that the success has been achieved by chasing excellence as opposed to the pursuit of profit. It is a mantra he repeats several times during the interview.

“We adopted a mindset of wanting to be best in class,” he says. “It is a funny thing to say, but we were not totally financially or profit motivated. We were there to build the business, to be best in class. For us, it was about getting it right and the success would follow.”

Later in the interview, he comes back to the same theme: “Success brings profit. A lot of people want to make growth or profit without success. So, we were more of a success story early days than a profit or a growth story. But they do eventually merge.

“We wanted to solve a problem, and I still have the view that if you want to solve a problem, and that if you can solve that problem, success will follow.”

I ask Kelly if he anticipated just how large the company would become.

“We always had this aspiration to grow. And we thought that the Holy Grail was €100 million for us. We were setting our sights on it. We were employing people to get there, and we felt that was the pinnacle of where we needed to be. And then you get to €100 million, and you start talking about the $500 million story. You get there and it is the $1 billion,” he says.

“Did I sell at a good time or a bad time? Who knows?”

He adds: “I think what we have done we did quite well, and I won’t take credit for this, we built a team that was able to handle the scale. And I think for me that was important, particularly from the TwoWay side of things, selling to Amarex, which is a public company. It was a large organisation. I was a CEO within that organisation. So, you knew the infrastructure that was needed to actually scale.”

This sense of scale, and what is required to achieve it, is something he believes is missing from a number of start-ups. “No disrespect, they have the dream. But I had the grey hair going into this business, so it probably helped somewhat to get to the other side.”

I ask if the company has continued to grow after the Covid lockdowns. Many technology companies have been burned from over hiring and overextending during the Covid years.

“We have kept growing. We still have a significant number of open jobs. At any one time, there are probably 200 open roles. Is there more of an air of caution? Clearly, there should be,” he says adding that there has been a levelling out in recent months in relation to over hiring.

“I think there were some salary inflationary pressures that were really challenging to the industry. So, maybe there is a bit of a reset button, and that mightn’t be a bad thing. I think talent acquisition became a problem during Covid.”

He also admits that maintaining culture during the Covid years, when staff worked remotely, was also a challenge. “We take on 20 to 40 interns a year,” he says. “They need a presence in the office. They need learn from people of a different age bracket.”

People like Kelly himself, who, at 63, remains determined to keep going, to keep driving the business.

Even though he is now one of the country’s richest men.

Money is a by-product of success

Two years ago, Kelly sold the remaining stake in the business to Asendia. It was, he admits, an inflection point in his life. He had a decision to make. Drive the business to revenues of more than €2 billion and pull the trigger on an IPO or sell to partners he had worked with for close to a decade.

He chose the latter, and the timing could not have been better; Covid had propelled e-commerce to the top of the market, and it was long before the tech slump. “It is a nice aspiration to hold on to it, but, realistically, why?” he asks.

“If I was 20 years younger it might have made sense to do different things. But there was a reality. I had started it with a plan. It was a plan that, as you said earlier, exceeded a lot of expectations. I had two choices, go public knowing that I would not be there for the next 20 years. So, go public or sell. That was the reality.

 “I had a ten-year relationship with Asendia. I knew who my partners were. We have a really strong relationship. So, it was a sort of natural inflection point for it to happen. So, it is not as if it was a forced sale.

“Did I sell at a good time or a bad time? Who knows?”

I ask if the flotation is still possible for him and the business. “There is no rush. We are a very profitable business. Will we do it? It has been rumoured. I would say openly that the timing is not good. Is it something that we have and will consider? Yes.”

This is the second time that Kelly has sold a company and remained on board with its new owners. However, this time around Kelly is in his sixties and the scale of the payout is a multiple of the last time around.

When I ask Kelly how he maintains the motivation to keep driving the business, the businessman sits back, pauses, and smiles.

“I laugh about that,” he says. “I never work for money. It is a fact. Money is the by-product of success. I suppose if you are completely money motivated, it would change your dynamics somewhat. And touch wood, thankfully for me, I have no desire to go drinking Pina Coladas on a beach.

“I still have a huge amount of motivation about the company, about how we continue to grow. It is funny. With a lot of people, the motivation is just about ‘how do I make a lot of money?’ But I am not sure that’s what one should aspire to.

“Do you know what I mean?”

The Tommy Kelly interview: Part two – Deploying a fortune, fear of failure, and the Irish economy