Türkİye, Economy

Turkish Startups Eye Success in the Global Market

Digitalization surged during Covid-19 spurred $2 billion investment in Turkish entrepreneurs

Bahattin Gonultas  | 07.12.2023 - Update : 07.12.2023
Turkish Startups Eye Success in the Global Market


Over the past three years, Turkish startups have experienced an investment boom, outpacing many European competitors in terms of attracting investments to the country’s entrepreneurial economy.

“In five years, our vision is quite ambitious,” said Ali Kocer, Managing Partner and Co-founder of Bottobo Robotics.

“We want to grab at least 2 percent market share from the robotics industry, which is valued at around $20 billion.”

Last year, Türkiye ranked 12th in Europe in terms of startup investments, while Istanbul secured the 6th spot among European cities.

Moreover, Istanbul clinched the 2nd position in the gaming industry across Europe, closely trailing only behind London.

A. Burak Daglioglu, President of Türkiye’s Investment Office, noted that technology companies in Türkiye have attracted around $3.5 billion in investments over the past three years, with a significant portion originating from overseas.

Last year saw 277 startup deals in Türkiye, as reported by the accounting firm KPMG’s Turkish Startup Investments Review 2022, marking an increase from 255 deals in 2021. The total value of these deals surged to $1.84 billion from $1.4 billion over the two years. Türkiye’s startup landscape started to take off in 2017, when seasoned venture capitalists contributed to launching global successes, such as the delivery company Getir.

Developments on the investor side, as well as legislative changes, have also helped the country reach new heights.

Investor-side developments, combined with legislative changes, have played a pivotal role in propelling the country to new heights.

Six unicorns in three years

While Türkiye had not previously produced a "unicorn" – a startup valued at over $1 billion – that changed in 2020 with the emergence of six such companies. They included Getir, Dream Games, Hepsiburada, Trendyol, Peak Games, and Insider.

The COVID-19 pandemic accelerated the digital transformation in all sectors, leading to a $2 billion investment in Turkish entrepreneurs, according to Serkan Unsal, founder of the investment analytics platform Startups.watch.

"This year, there is a shortage of funds in terms of investment all over the world, including Türkiye,” he noted. “Turkish startups secured $154 million in a nine-month investment round in 2023. However, a few large investments in the remaining three months could see yearly investment reach $800 million in 2023," Unsal added, making Türkiye the lead country in southeast Europe.

“If you look at the Turkish entrepreneurial ecosystem for the past two decades, you will see that initially it was only local success stories in the first decade, and then the global success stories emerged,” said Enis Hulli, General Partner at 500 Emerging Europe. “This is a country where there were zero unicorns in 2019. And now we have six unicorns that we've produced over the past three years,” added Hulli.

In 2022, gaming, artificial intelligence and machine learning, and FinTech verticals were Türkiye’s top sectors.

“We have brilliant minds, really great support from the government as well, with lots of different tax incentives,” Kocer said.

According to Unsal, an average of 600 startups are established in Türkiye every year. “We are in a good position compared to countries that have no unicorns,” he added.

Türkiye’s Investment Office has been working on technology entrepreneurship since 2015 and trying to raise interest among international investors in this field.

“One of the most important topics is to increase our exports, particularly in the field of technology,” Daglioglu said.

“Otherwise, as the world is digitalizing, it will be impossible to achieve those ambitious goals through traditional means alone. There is a lot of competition there.

Slush, a technology and startup investor exhibition, is also assisting with investment by “creating an enabling environment directly between companies and their target audiences to accelerate our technology exports,” he added.

Turkish innovative startups aim for global reach at tech conferences

Until 2018, Turkish startups primarily concentrated their growth strategy on Türkiye, with internationalization relegated to a secondary role, influenced primarily the ample opportunities provided by a substantial domestic market, allowing companies to achieve scalability without an immediate global focus.

Recently, an array of triumphant expansion narratives has ignited a new wave of inspiration among entrepreneurs. These success stories have prompted them to actively seek opportunities beyond Türkiye’s borders and strategically plan the introduction of their products and services into international markets.

Investment Office fosters investment in Turkish tech startups and supports their global expansion by providing access to major international innovation events.

This year Slush drew in an attendance of 13,000 visitors from more than 100 countries.

Showcasing innovations in digital finance services, augmented reality, virtual reality, digital health services, and smart medical devices, Turkish startups had the opportunity to meet with potential investors and expand their visibility on the international market.

Led by the Investment Office, more than a dozen promising startups recently participated in Slush in the Finnish capital of Helsinki.

Among the Turkish startups present was Heybooster, providing an AI-powered analytics platform for e-commerce; Macellan, a tech-led venture studio; Pivony, an omnichannel consumer intelligence platform using Deep Neural Language Understanding; and Vispera, offering IR-based retail execution and tracking services to the retail industry.

“I consider Slush as one of the top 10 startup conferences around the globe,” Hulli remarked, emphasizing that “Venture capitalists from the US, the UK, and Asia are all in attendance. We aim to network with these top funds around the globe to attract more capital into our portfolio.”

Gokturk Yetim, CEO, and Co-founder of Macellan, shared that his firm secured a $4.7 million investment last year.

“We attend all global events; we were in Web Summit, and now we are at Slush,” he stated. “Our goal is to showcase our businesses to global investors and companies. I managed to secure 15 appointments from investors in two days at Slush.

"If all goes well, we plan to go global within five years."

Türkiye’s demographic potential

Türkiye has a sizable youthful and urbanized population. According to last year’s data, nearly 77 percent of the 85.27 million population live in towns and cities.

While the average age is 33.5, nearly 13 million are aged 15 to 24, or 15 percent of the total population – a larger youth population than most EU countries.

As young people are more likely to adopt new technologies, Türkiye’s population provides startups with a solid domestic customer base.

Its large economy, tech-savvy population, and deep talent pool also serve as a breeding ground for ambitious tech startups aiming to go global or expand into regional markets.

The country’s competitive and entrepreneurial culture is widely credited with a business environment that sees more than 600 new startups a year.

“Türkiye has a lot of good talent and skill sets,” Hulli said. “Turkish engineers now are well-equipped with the culture, skill sets, and connections to build for more Western-developed technology markets.”

In the past, entrepreneurs in Türkiye used to struggle with sustainability, according to Unsal.

"Our entrepreneurs were solely focused on dominating the Turkish market. However, in the last five years, this mindset has undergone a significant shift. Today, most of our entrepreneurs aspire to go global and seek funding opportunities," he said.

Unsal encouraged startups to take advantage of state-sanctioned incentives to reach global markets, referring to Türkiye as an investment "paradise" due to state support.

Türkiye: Home to most female-founded unicorns in Europe

Four of Türkiye’s six unicorns – Getir, Dream Games, Hepsiburada, Peak Games, Trendyol and Insider – were founded by women, indicating a growing trend for female involvement.

Trendyol Group’s International Trade Director Burcu Yasar stated that women made up 58 percent of the company's 2,000 employees. "Not only our employees but also 28 percent of the more than 300,000 sellers on the platform are women,” she added.

According to Yasar, Türkiye’s youthful population, the embrace of advanced technology, and widespread internet usage offer opportunities for investors looking to trial their products in the country before expanding to Europe and North America, where customer behavior mirrors that of Türkiye.

“Promoting gender equality and supporting female entrepreneurs is a key focus,” Daglioglu said. “Türkiye leads many of its competitors in this regard.”

Türkiye’s location​​​​​​

In addition to its large population, Türkiye’s geographical location provides entrepreneurs with easy access to Europe, the Middle East, North Africa, and Central Asia.

"It is very easy to start a venture, develop a product, test it, and scale it in Türkiye,” he said.

“As Investment Office, we assist startups in accessing capital. We have witnessed a growing number of tech startup funds in Türkiye over time, and we maintain close collaboration with all of them. We advise that if startups have good ideas, they should fiercely pursue them.”

Daglioglu emphasized, “Türkiye has consistently rebounded from global crises, achieving double-digit growth rates. The country's reform policies have created a competitive and investor-friendly business environment.”

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