INVESTMENT IN STARTUPS CONTINUE TO GROW IN TURKEY
Turkish startups received investments of $18.9 million in Q1 2018, with around 43 percent coming from foreign funds and some 15 percent from various institutions
TURKISH startups received investments worth $18.9 million in the first quarter of 2018, market intelligence and analytics platform startups.watch has revealed.
According to startups.watch’s first quarter report for 2018, around 43 percent of the investments came from foreign funds, while some 15 percent came from different institutions. With different organizations joining in, bigger investments along with seed investments picked up the pace. Investments in Insider and Foriba were the main drivers behind the upward first-quarter data.
Sector-wise, service-based software, marketing, finance and regulatory technologies drew the highest amount of investment. Tech enterprise Foriba played a leading role during this period.
In the first quarter of 2018, institutions accounted for 15 percent of early investments. Accordingly, Türk Telekom's venture capital company TT Ventures invested in Doctor Turkey. E-Vend, which focus on vending and payment systems, received investment from Macgal Otomat. Garaj Sepeti was another enterprise that received corporate investment funds from Finberg. Startups that received foreign investments in 2017 also included iyzico, Zebramo, ototrink, OtelZ, Biletall, Reengen, KolayIK, Marketyo, Orthero, Evtiko and Insider.
DIFFERENT DNA
Hasan Aslanoba, the founder of Turkey’s largest and most experienced angel investor, Aslanoba Capital, said “The DNAs of technology and internet enterprises are different from conventional businesses. They must have the character and ability to get organized for fast growth. Because of mobile and internet technology, everyone has become data consumer. Thanks to artificial intelligence (AI) applications are also becoming more capable. We can also see how cryptocurrency and blockchain may deeply affect not only the lives of people but also countries.”
DIGITAL AGE
Aslanoba said that companies and institutions should invest more in technology enterprises in order to survive in the digital age.
“I see tech giants like Google and Amazon positioned horizontally while tech startups are positioned vertically. If you think of technology companies as brain power, traditional companies are more like muscles in a body. If traditional enterprises do not quickly adapt to transformation with venture capital funds and programs they will be left behind in the digital revolution,” Aslanoba said.
SEED INVESTMENTS DECREASE
The number of seed investments fell from $6.8 million to $3.7 million in the first quarter of 2018. However, interest in advanced investments allowed the decline to be limited. In fact, the transformation of seed investments into advanced entrepreneurship can be viewed as a positive development for angel investors.
TL 80 BILLION INVOICES PER MONTH
Koray Bahar, the founder of Foriba which works on regulatory and finance technologies, said they managed almost 70 percent of the digital invoices in Turkey. He added that every month they mediate electronic invoice worth TL 80 billion ($19.53 billion).
He said that Foriba has more than 7,000 clients in Turkey, including major conglomerates and support more than 350 international companies for electronic invoices in Turkey.
“Before getting the first investment from Revo, the company had just 30 people. Back then we were targeting only major institutions. We would write codes in the morning, prepare proposals at noon and go meet customers in the afternoon,” Bahar said.
“But the channel structure is something different. Venture capital fund Revo and Turkey's Turkcell experience was very important for us. We benefited much from their experience as they created a channel that could reach smaller clients online.”
HUMAN RESOURCES ARE CHANGING
Expertera, which received investment worth TL 17.1 million from Etiya, is a platform that meets the flexible working needs of employees along with any talent and expertise deficit.
Stating that they were the only company in this field in Turkey, Expertera founder Alp Sezginsoy said each company may not have enough experts on each issue and the cost of having some particular expertise can be quite high.
“Expert employees also want to switch to flexible working methods. We are trying to create a platform that brings both sides together,” he said.
Etiya CEO Aslan Doğan highlighted that not only technology but also human resources were undergoing significant changes.
“We talk about technology, but the workforce or human resources culture is very important. We believed in Expertera's business model and teamwork. We previously created three different enterprises in Etiya. We continue to support those enterprises by completely removing them from the company,” Doğan said.
“Enterprises appreciate the value of the customers most. At Etiya, the training provided through working with entrepreneurs ensures that our employees enjoy this culture, which is very valuable.”
$120 MILLION DATA CENTER
İnanç Erol, the founder of NGN, which built a 45,000-square-meter data center in Turkey with an investment of $120 million, recently answered some questions about the sector in a panel.
“Building a world-class data center in Turkey was an important decision. It was also a very important process to persuade the Russian investors. We struggled for a couple of years. In the end, our partners are aware of Turkey’s potential,” Erol noted.
“We were able to build a data center with the help of some world-class technology companies. We want to set up business models to support technology enterprises in this regard,” he added.
Eren Baydemir, the founder of Team SQL that develops solutions to make it easier to do business through the database, said that increasingly complex databases made it easier to work platform-independent.
“It is much more important now to offer choices to institutions than to products. We make it easier for each institution to access the database. So, we make it easy to do business with data,” Baydemir said.