Cork firm We Are Riley closes in on €1m crowdfunding target

Some VCs are becoming more conservative when it comes to investing due to headwinds including interest rate hikes.

Founders of the Cork start-up We are Riley, which sells sustainable period products, Lauren Duggan, Fiona Parfrey, Aine Kilkenny.  With more than 20 days left of the campaign on the crowdfunding website Seedrs, We Are Riley has already raised more than €800,000

We Are Riley, the Cork start-up that sells sustainable period products, has launched a public crowdfunding campaign where it is seeking €1m in investment, and so far it is on track to surpass this target. 

With more than 20 days left of the campaign on the crowdfunding website Seedrs, We Are Riley has already raised more than €800,000 and intends to use the overall investment to grow headcount from the seven people it already has and establish a presence in more international markets.

“This is our second crowdfunding campaign and following the success of our first campaign in late 2021, which went into over-funding, we decided to go again,” said We Are Riley co-founder Fiona Parfrey.

Crowdfunding is gaining traction as an option for early-stage companies recently. Food order app Peckish, another firm from Cork, raised around €150,000 raised through another website called Spark Crowdfunding last year.

Ms Parfrey said that while We Are Riley has some angel investors getting on board in this fundraising round, the company hasn’t ruled out the VC route. “Although as a consumer brand it is definitely harder to raise funds this way in Ireland,” she said.

Some VCs are becoming more conservative when it comes to investing due to the volatile economic environment, including a series of interest rate hikes. In recent years, start-ups have received a huge amount of VC funding due to historically low interest rates which allowed them to take more risks. 

However, the relationship between VCs and early-stage companies has become more one-sided as the European Central Bank (ECB) has lifted rates by a combined 375 basis points since last summer in an effort to drive down stubborn inflation.

“People are freaked. People are afraid to do things with their money,” said Keving Canning, investment director of the Employment and Investment Incentive Scheme (EIIS) Innovation Fund with Quintas.

Quintas is a professional services firm which operates an accountancy practice with 45 staff in Cork and 20 direct staff members in Kerala, India. Mr Canning made his comments to a room full of start-up entrepreneurs at an event hosted by Republic of Work, a co-working space for early-stage companies in Cork city.

At the event, which focused on the pitfalls and opportunities in securing funding for fledgling firms, Mr Canning said that many investors are choosing to leave their money in the bank rather than inject it into new companies. This has led to a fall in valuations among start-ups.

“Valuations are clearly falling from where they were 18 months ago. They’re ridiculously low in comparison,” said Mr Canning.

Much of the conversation at the event, held on a wet and cold Thursday evening, was bleak in relation to securing funding amid ongoing economic challenges. However, there were some silver linings. “This is a good time though for the EIIS as it is structured more like debt than equity so valuations are not as important,” said Mr Canning.

The EIIS provides tax relief to private investors for risk capital investments in qualifying small to medium enterprises, to assist companies to raise finance to allow them to expand and create or retain jobs.

“There’s some amazing companies that have come to us in the last six or seven months and there is no way they’d be talking to us if it was 18 months ago. They would definitely have just gone to VCs,” said Mr Canning.

The next few months are set to remain turbulent for early-stage companies looking to secure investment, with more rate hikes planned later this year. However, Mr Canning reassured the room of optimistic businesspeople that if you have “a great company, you’ll always get funded".