06 Mar 2018 | 05.14 pm
How Daithí O’Connor Grew Revive Active
'Without EIIS, we'd never have gotten out of the blocks'
06 Mar 2018 | 05.14 pm
In 2009, Daithí O’Connor’s financial services company in Galway was running on fumes, exhausted by the recession. He sat at his desk, mulling a change of direction, and gulped down a sachet of vitamin supplements dissolved in water. The drink immediately got O’Connor thinking. “A friend gave me the supplement and I could see the benefits of it,” he recalls. “I had been considering solar energy and other business ideas to get into at the time, but this supplement intrigued me.”
Shortly afterwards, O’Connor teamed up with fellow entrepreneur Liam Salmon to build a business around the health supplement idea. They called their firm Revive Active and worked hard from the start to find a niche in the disparate, Berocca-driven market for soluble vitamin supplements.
That initial glass of fizzy liquid was the motivator, but O’Connor says that the Employment and Investment Incentive Scheme (EIIS) was the catalyst that accelerated the change. Thanks to EIIS and its tax relief on equity investments, the founders got some crucial early stage backers on board to finance their business.
However, when O’Connor and Salmon decided to raise EIIS funds in 2013, their initial efforts were in vain. “We contacted the established EIIS funds but they weren’t interested – we were too small and they didn’t know us,” says O’Connor. Revive Active ended up organising its own EIIS campaign, and in December 2013 raised €100,000 from Supermac’s founder Pat McDonagh and €100,000 from Ballinasloe investor John Kilcommons
McDonagh and Kilcommons invested the same amounts again in 2014 and 2016, for a total from the pair of €600,000, with €350,000 of that channelled through EIIS. “That gave us ammunition to move forward. Without it, we’d never have gotten out of the blocks,” O’Connor maintains. The bonus for Revive Active is that the outside equity investment leveraged taxpayer support from Enterprise Ireland – €300,000 in 2014 and €100,000 in 2016. For very little down themselves – €100 in equity – in a three year period O’Connor and Salmon ended up with €1,000,000 of outside capital to work with.
Revive Active, with annual turnover around the €4m mark, sells six health supplement products and is stocked in around 1,000 stores and pharmacies across Ireland, as well as in 60 or so outlets in London. The brand also shifts boxes of sachets through its website to customers in Europe, the US and Australia.
O’Connor (56), who was a finalist in the EY Entrepreneur of the Year 2017 competition, is now looking at further expansion in America. He’s getting advice from McDonagh, who joined the board of directors in June 2017. “Pat is only five minutes away from me here in Galway,” says O’Connor. “He’s familiar with the US market and has businesses out there. He’ll be a good help to us – Pat doesn’t back losers.
“Having Pat as a director and supporter adds huge credibility to our business. If you’re an SME looking around for finance, you could try the banks or maybe some Dublin-based finance groups. The latter are very expensive and have terms that are full of caveats, catching you on the way in and out. That’s why the EIIS scheme is vital for SMEs.”
Originally from Sligo, O’Connor got a taste for business early. When he was young he fished for salmon and hauled lobsters for his cousins in Aughris, a coastal Sligo townland. “They’d let me have part of the catch and I would sell it to my father’s friends. I was always making money, whether it was fishing for salmon or pulling pints behind the bar.”
O’Connor’s career took him into finance, where he worked for various banks and other institutions. In 2005, he went out on his own, establishing a financial advisory firm in Galway, called DC Atlantic Investments. “I was hungry for the business and enjoyed it all,” O’Connor says. “The fact that I was my own boss and doing things for myself hugely appealed to me.”
DC Atlantic paid its way, but income nosedived after 2007. “Money froze up and regulation increased. I would have had to merge with someone else to keep the business going. I didn’t want that – I had too much experience working for myself. I really wanted to do something else, something with an export angle.”
e supplement-enriched glass of water that he imbibed in 2009 provided the new direction for his business endeavours. O’Connor discovered that it was sourced in the US, and the friend introduced O’Connor to Liam Salmon, who had experience working for Boston Scientific.
Salmon and O’Connor researched the market and found that the health supplements sector was one of multiple brands and dosages. They decided to develop a new product with assistance from Willie Wixted, co-founder of ABC Nutritionals. The first Revive Active product comprised 26 vitamins and minerals, with a box of 30 sachets priced at €59.95.
Revive Active began trading in 2011. “We took expenses but no salary for the first 18 months,” O’Connor recalls. “Because we were a startup, nobody would give us credit. We were paying for the ingredients, manufacture, packaging and marketing up front. We also had to ask retailers in Galway to pay upfront.”
Initially Revive Active targeted customers in the 35 plus age bracket and had an image of an older couple as part of its branding. “There were rugby players in Limerick buying it but they’d bring it out of the shop under their jackets because of the brand image,” O’Connor says. Soon though Revive Active caught on with students cramming for exams.
ABC Nutrition manufactured Revive Active and the business grew initially through word of mouth. “Money was hugely restrictive for us – we had our feet on the accelerator and brake at the same time,” adds O’Connor. The big break came via Lloyd’s Pharmacy. The product was being sold in a Lloyd’s outlet in Limerick when Lloyd’s managing director Goretti Brady came across it. When she saw how well it was selling, she listed Revive Active in the pharmacy chain’s other 110 stores.
Buoyed by the favourable reception, O’Connor and Salmon took on an R&D director to plan more product development. The second product in 2013 was an Omega-3-rich krill oil, sourced from a Norwegian company. A Joint Complex, using marine collagen from a French supplier, was launched in 2014.
In 2015, O’Connor and Salmon launched Mastermind, a B-vitamin-infused supplement to boost cognitive function. They followed this in 2016 with an Ubiquinol CoQ10 supplement to boost cellular health. In 2017, the company launched a beauty boosting formulation containing collagen and other ingredients.
Pharmacies account for the bulk of retail trade. According to O’Connor, UK expansion has been a challenge. “We are stocked in some prestigious pharmacies but expanding through retail in the UK would require a huge amount of investment, and we’re competing with the NHS too.”
So the export focus is now on America. “Our FDA approval is pending in the US – I think the market there is perfect for us. The plan is to sell to the market intensively online for 12 to 18 months, before looking at retail opportunities. We’re also looking at developing our online sales in Germany, Scandinavia and other European markets.”
Revive Active employs 19 people and the offices and warehouse are located in a premises previously occupied by James Murphy’s successful health and beauty products venture, Lifes2Good. “Everything goes directly from here,” says O’Connor. “We don’t deal with distributors as we can’t afford to.”
Liam Salmon exited the business in April 2017. “Liam came and told me he wanted to do something else. His departure was as amicable as these things can be. We agreed a price, he sold up and moved on.”
Two new Revive Active product launches are planned for 2018. “We’re working in collaboration with Kerry Group on one of those products and I’ll be looking for another year of 40% turnover growth. Around 15,000 consumers take our products on a daily basis. There’s no reason why we can’t double that.”