Turkey Startup Ecosystem
1. Country Overview
startup ecosystem is fairly young, but very promising for startups, especially
in technology. Turkey has embarked on a challenging journey to transform itself
into an entrepreneurial society. The country’s ecosystem for entrepreneurs is
relatively under developed, but new initiatives are helping Turkey to improve.
Turkey is a tantalizing market for entrepreneurship. It is strategically
located between key markets in Europe, the Middle East, Russia and Central
Asia. It has a young and educated workforce. Nearly half of the country’s 78 million
people are on-line, giving it the fifth largest Internet audience in Europe.
As the EY G20 Entrepreneurship Barometer 2013 shows, Turkey continues to lag behind its G20 peers on entrepreneurs’ access to funding. This is despite a sharp increase in bank lending to Turkish entrepreneurial businesses, which more than doubled between 2007 and 2011.
From think tanks focused on economics to large corporations, startups are on the immediate agenda. For example, The Economic Policy Research Foundation of Turkey (TEPAV), a think tank looking at economic issues, has partnered with the United States’ Global Entrepreneurship Program to provide a platform for Turkish entrepreneurs to network with American entrepreneurs and funders. And the Young Entrepreneurs Board of the Union of Chambers and Commodity Exchanges of Turkey (TOBB) always takes an active part in the design of the Turkish government’s new initiatives.
None of the startups in Turley were accelerated/incubated by 500 Startups and none of them were listed in the Y Combinator. However, there are notable startups.
Launched in March 2010 with the motto “A New Way To Shop”,
Trendyol.com is the leading fashion e-commerce site which offers a broad range
of items from superior and famous brands to customers with discounts reaching
up to %90. Powered by the investments of Tiger Global and Kleiner Perkins
Caufield & Byers, Trendyol.com continues to grow rapidly with a dynamic team
with over 900 employees dedicated to provide the best service to its customers
and brands while realizing its goal of making fashion accessible to all.
Trendyol.com makes deliveries all around Turkey.
Trendyol.com brings a wide range of content to its members which mostly includes style, fashion and trends. With Modagram.com the sub-website launched lately, Trendyol.com provides over an amount of 10.000 products everyday to its 6.5 million active members.
Markafoni is a Turkish private shopping club. They actually started with 1 product, 3 employees, 4 customers who were the founders themselves). Nowadays, they turned to be a company with 330.000 products, 350 employees, 900 brands. The challenge during these days was to grow all departments of the company at the same time and to be as successful as the days in selling 30 packets/day in selling 350 packets/day. Markafoni, 2 years after their foundation, have raised £4.7 million (11 million Turkish Lira) from Trayas, an investment group whose partners include leading European investors Klaus Hommels and Oliver Jung.
Yemeksepeti.com was founded in Istanbul in the beginning of the new millennium as Turkey’s first online food ordering website. Apart from the websties such as the ones of Papa John’s, Domino’s etc. and the websites of other small restaurants, as an independent online food ordering company, it also created the first business model globally which gives out the opportunity to order food online without paying a service fee.
By the end of 2013, Treasury has given licence to 154 angel investors. Full list of the angel investors can be found in http://www.slideshare.net/Kafatech/trkiyede-aktif-melek- HYPERLINK "http://www.slideshare.net/Kafatech/trkiyede-aktif-melek-yatrmclarn-tam-listesi"yatrmclarn-tam-listesi and Galata Business Angels and Istanbul Melek Yatırımcı Merkezi (Istanbul Center for Angel Investors) are the group of prominent angel investors.
Endeavor is a non-profit that supports “high-impact” entrepreneurs around the world. Started in Argentina and Chile in 1997, it works to identify promising innovators in emerging markets that are leading companies with the potential to go to scale and attract venture capital. The outfit launched an office in Istanbul in 2006. It has identified a handful of high-growth entrepreneurs that are making waves in mobile (Pozitron) and wireless technology (AirTies). Yemeksepeti is an Endeavor find.
The Turkish government and other public institutions have done a good job in laying the framework for Turkey’s entrepreneurial ecosystem. Of note is the Turkish Ministry of Science, Industry and Technology. It supports technology parks and provides up to $55,000 in seed capital for entrepreneurs through the “Techno-Entrepreneurship Grant Program.” Next year this ministry plans to establish “science and technology counselor offices in various developed countries” such as the United States, Germany and Japan.
Scientific and Technological Research Council of Turkey (TUBITAK) is another government body extending grants, subsidies and other incentives for entrepreneurs. It encourages research and development.
The Economic Policy Research Foundation of Turkey (TEPAV) is a think tank looking at economic issues. It has partnered with the U.S. State Department’sGlobal Entrepreneurship Program to provide a platform for Turkish entrepreneurs to network with American entrepreneurs and funders.
Most impressive is the independent Turkish Technology Development Foundation (TTGV), which was established in 1991 as part of a World Bank loan agreement with Ankara. It has supported “technological innovation activities in Turkey,” providing $300 million to 950, largely R&D, projects, carried out by 800 companies. TTGV also contributed to the establishment of investment firms, Is Girisim and TURKVEN, both of which launched in 2000 and have made combined investments over $3.5 billion. This has laid the ground floor for Turkish venture capital.
Additionally, KOSGEB has Entrepreneur Support Program aiming at developing and disseminating the entrepreneurship as the basic factor for solving the economic development and employment issues, establishing successful and sustainable enterprises, disseminating the entrepreneurship culture, developing entrepreneurship by establishing the Business Improvement Centers (BICs), raising the employment level, supporting the entrepreneurship based on the local dynamics. Enterprise Establishment Support provides 5000 Turkish Lira without payback. Machinery, Equipment and Office Hardware Support provides 10000 TL and Operational Costs Support provides 12000 without payback. Fixed Assets Investment Support provides 70000 with payback. These programs support females or handicapped people.
Izhar Shay, an Israeli-based general partner with Canaan Partners, told me recently, “venture capital lives and is based on entrepreneurship. There is no way to apply venture capital if there is no entrepreneurship.” By that measure, Turkey has something positive going on. There is a vibrant angel network.Galata Business Angels is a prominent platform of high net-worth individuals putting money into Turkish start-ups. There are also a handful of, mainly early-stage, investors in Istanbul.
The Istanbul Venture Capital Initiative (IVCI), launched in 2007, is the first of these early stage funds. It is a EUR 160 million fund of funds, again backed by TTGV and the European Investment Fund (EIF), as an vehicle to encourage others to take out risk in Turkish start-ups. IVCI director Jose Romano describes it as being a “catalyst to advance the development of the (Turkish VC) industry.” It has given a number of largely European and some Turkish investors the courage to gamble on Turkish start-ups such as Golden Horn Ventures. (NOTE: Some Turkish readers interpreted this to mean that IVCI or EIF has given Golden Horn money (rather than courage as I meant). Golden Horn is an independent fund. It has not received funding from IVCI or EIF: IVCI/EIF has not put money into Golden Horn.)
212 Capital Partners, is the latest risk taker to dive into the Turkish entrepreneurship market. Launched this year with a first round fund raised among Turks totaling $30 million, it is eyeing early stage investments in tech start-ups in e-commerce, gaming and software applications.
e-Tohum: Started in 2008, e-Tohum is one of Turkey’s first start-up “catalyzer.” It screens several hundred applicants, selecting 40 to pitch to investors. Those investors identify 15 that move on to e-Tohum’s accelerator program. e-Tohum invests in those companies that show exceptional promise. “Our aim is to help these (Turkish) entrepreneurs grow fast,” says founder Burak Buyukdemir. The fund is small, only $175,000 and has made 25 seed investments.
Start-Up Factory: Housed at the privately run Ozyegin University on Istanbul’s Asian side, the Start-Up Factory provides space and services to start-ups. Backed by mobile giant Turkcell, it’s goal is to help start-ups “survive death valley.”
Founder Institute: Silicon Valley-based, the Founder Institute is opening its doors in Istanbul. It’s, according to its website, “an early-stage and global launch network that helps entrepreneurs create meaningful and enduring technology companies.”
Murat Aktihanoglu is also active in this space via New York where he is a managing director at Entrepreneurs Roundtable. He’s held a number of ER seminars and events in Istanbul.
Global Entrepreneurship Week is the world’s largest celebration of the innovators and job creators who launch startups that bring ideas to life, drive economic growth and expand human welfare.
During one week each November, GEW inspires
people everywhere through local, national and global activities designed to
help them explore their potential as self-starters and innovators. These
activities, from large-scale competitions and events to intimate networking
gatherings, connect participants to potential collaborators, mentors and even
investors—introducing them to new possibilities and exciting
In November 2013, 138 countries host Global Entrepreneurship Week and Turkey is one of them.
Endeavor Turkey is the main coordinator for the local Global Entrepreneurship Week (GEW) campaign. This local chapter of Endeavor boasts a network of 140 mentors and 36 selected high-impact entrepreneurs. Its GEW campaign this year offers approximately 150 events through 200 partners, such as the International Entrepreneurship Initiative (IEI and in Turkish UGM).
International Entrepreneurship Initiative is a multi stakeholder programme initiated by UNDP Turkey, IICPSD, TC Ministry of Development, Habitat Center for Development and Turkey Vodafone Foundation to support socio-economic development benefiting from and supporting entrepreneurship. IEI enhances entrepreneurship ecosystem building strong partnerships with 52 relevant stakeholders including the Union of Chambers and Commodity Exchanges of Turkey (TOBB), National Women and Young Entrepreneurs’ Councils, Intel, Cisco, Microsoft and Visa.
With hordes of engineering majors, nearly all Turkish universities are focused on entrepreneurship in some way. Publicly run schools such as Istanbul Technical University and Middle Eastern Technical University are, with the government’s support through technology parks and space, focusing on innovation and technology. Private institutions are a bit further ahead with actual MBA classes on entrepreneurship. That’s happening at Bilkent, Koc,Sabanci and Ozyegin Universities. Ozyegin University rolled out the country’sfirst masters in entrepreneurship this fall. Still, tech transfers are a glaring gap in Turkey. Universities need to work on case studies and directly with entrepreneurs and companies to get innovation going.
1 NEVZAT AYDIN (34) Founder of Yemeksepeti.com
2 ARZU KAPROL (38) Founder of Arzu Kaprol
3 CİHAT DÜNDAR (38) Founder of B’iota Laboratuvarları
4 ALP SAUL (39) Founder of Pronet
5 KEREM ÇATAY (32) Founder of Ay Yapım
6 SEYHAN ÖZDEMİR (35) – SEFER ÇAĞLAR (35) Founder of Autoban 212
7 FERDA KERTMELİOĞLU (40) Founder of Mobilera