More than 300 people gathered in the Guinness Storehouse on Tuesday for the Elkstone venture showcase. 

Alan Merriman, the co-founder of the Irish investment house, framed proceedings and a series of panel discussions followed with contributions from the likes of tech entrepreneur Bobby Healy, venture capitalist Nicola McClafferty, and Eoghan Quigley, a tax partner in KPMG.

Healy and McClafferty are more well known, but Quigley is low profile, and a prolific angel investor, notably backing Clonakilty’s Global Shares, which was sold last year to JP Morgan for €665 million. He has also backed Kealon Lennon’s CleverCards and Dr Harriet Treacy’s BeyondBmi. 

There was buoyancy in the room; not just from the Guinness beforehand but by the $1 billion valuation given by Softbank to Barry Napier’s Cubic Telecom. The deal came after a period when the Irish tech sector had been under pressure post the pandemic. It was good to see that great businesses can still attract strong valuations.

But Merriman’s fireside chat with Dr Patricia Scanlon, the founder of SoapBox Labs, was just as inspiring a business story as that of Cubic. It also has the potential to positively impact the education of tens of millions of children using its proprietary technology and artificial intelligence.

SoapBox was sold to US education giant Curriculum Associates at the end of November for an undisclosed sum. Introducing Scanlon, Merriman said the deal was, he believed, the largest sale price ever achieved by an Irish-based female founder. 

Elkstone was among the first investors in SoapBox Labs in 2016. It followed its money, leading a $6.5 million funding round in 2020. Scanlon’s story is fascinating as she went from working in cutting edge research in Bell Labs to setting up her own company out of frustration at seeing “projects get canned” rather than being allowed to follow them through. 

The “lightbulb moment” for Scanlon came when she observed that her three-year-old child spoke very differently to an adult. This gave her the insight to realise that speech recognition technology needed to be adapted for children if it is to work. 

The company built a voice engine capable of understanding the unique speech patterns of children, allowing it to be plugged into classroom focused education technology to support early literacy, reading fluency, and language learning. This was the “gap” Scanlon saw, prompting her to take the risk to start a business.

Building new technology requires investment, and it was here that Elkstone and others were required to have the vision to risk their capital. This allowed Scanlon to build the team she needed to create SoapBox Labs. 

“I didn’t do it alone,” Scanlon said, adding: “I hired really well…smart, passionate people who believed in what we were doing.” 

Scanlon said SoapBox’s staff churn was low with key people like CTO Dr Amelia Kelly and VP of Engineering Robert O’Regan being with her almost from the start. Having a shared sense of mission, Scanlon said, was vital to SoapBox’s success: “The team joined because of what we do, and stayed because of what we did.”

Merriman said Elkstone looked for founders who were able to attract talent prior to making any investment. “It was not just about the financial return, but because of the impact,” Scanlon added. “It was important to all of us, including our investors who came with us on the journey.”

According to Scanlon, the decision to sell to Curriculum Associates was not driven by money, but by the desire to get its technology “into the hands of as many kids as possible”. 

“We have built world class speech recognition. It is world leading in terms of accuracy…but ultimately we were looking at how we can get this to as many kids as we can in the world,” she said.

“When Curriculum Associates approached we saw an opportunity to get us into the hands of a hell of a lot of kids a lot quicker.”

Although barely known in Ireland, Curriculum has 12 million students using its platform. “They are growing by 20 per cent a year,” Scanlon noted. “It felt like a very good home and fit in terms of culture, the team and the technology.”

Curriculum is not swooping into Ireland, and leaving with great technology. It plans to set up an innovation hub here to build on SoapBox’s existing team. 

“They want to grow here and drive all their AI innovation in Ireland,” Scanlon said. “It is a really good story for the SoapBox team and for Ireland.”

Scanlon and her team are to be applauded for bringing SoapBox Labs to this juncture, as are Elkstone for backing them. As it continues to deploy its €100 million seed fund into Irish start-ups, it will be worth watching who else it helps uncover.

When goodwill meets capital

When I interviewed Alan Merriman in November, he spoke about the road ahead for Elkstone and what it sees as the big picture for Ireland.

“Our north star is enabling deserving investments across the island of Ireland,” Merriman said. “We have a dual focus on the Irish market and the Irish diaspora.” 

“We want to enable deserving investments across the island of Ireland. And we believe we have the entrepreneurial vision to make this happen.” 

At the very end of Tuesday’s showcase, Ciaran McIntyre, a co-founder of Elkstone, gave an insight into what Elkstone means when it says this. 

Elkstone’s head of real estate spoke about a new fund that Elkstone was working on to invest in building student accommodation in Northern Ireland. The fund is expected to launch next year, and McIntyre said that, 25 years after the Good Friday agreement, the North is ready and ripe for investments. 

“Investing in Northern Ireland is not a charity; the returns from investing in Northern Ireland are market plus. It represents a great opportunity,” McIntyre said.

He did not reveal the size of the fund, but said it would build thousands of student beds. It will also set aside 10 per cent of its profits as an educational endowment to ensure people of lower incomes can gain access to third-level education. 

McIntyre finished with a video of Joe Kennedy III, the United States special envoy to Northern Ireland, who also spoke about the opportunity of investing in Ireland, and how more can be done to foster prosperity in the North.  

This bringing together of the goodwill and capital of the Irish diaspora in the United States, combined with well-thought-out investment opportunities will be a big part of the next stage for Elkstone.