Turkish startups bag record of nearly $1.6 billion in 2022

Turkish startups attracted a record of nearly $1.6 billion (TL 30.09 billion) in investments in 2022, according to the industry data, despite global headwinds, including a slowdown in funding that threatens the prospects of the ecosystem.

Some $1.59 billion was invested across some 300 deals in seed, early and later venture capital stages last year, the ecosystem monitor startups.watch’s annual report showed. The figure amounts to a record even when fast grocery delivery pioneer Getir’s $768 million funding round is excluded, marking a 26% increase to $825 million.

The last quarter of 2022 saw some $93 million being invested across 74 deals in seed, early and later venture capital stages, highlighted the report that was unveiled at an event in Istanbul this week.

It reflected a further slowdown as in all other major markets around the world, plagued by rising interest rates, soaring inflation and a fall in valuations that have resulted in a decrease in investment deals.

4th in world in gaming

Gaming and financial technology industries still managed to have their best year ever in terms of the value of the deals, according to the report that showed fintech, software as a service (SaaS), game, artificial intelligence and marketplace areas being on top in terms of the number of deals.

Excluding the Getir deal, some 54% of investments in 2022 consisted of gaming and fintech deals. Gaming attracted some $362 million, while fintech raised about $90 million, the data showed, up from $265 million and $69 million, respectively, in 2021.

Despite the fact that the number of deals halved to 24 versus a year ago, the gaming industry still helped Türkiye rank fourth in the world just after the U.S., Singapore and the U.K. and second in Europe in terms of locking game deals.

Among others, the data showed foreign investors joined one out of every five transactions last year. In addition, 116 out of 300 deals in 2021 had a company or a corporate venture capital (CVC) fund among the investors.

The CVC funds participated in 39% of the overall deals, also marking an all-time high, according to the report, a rate that way more than doubled that of 2017 and compared to 32% and 33% in 2020 and 2021, respectively.

VCIF impact

Meanwhile, the presence of venture capital investment funds gained weight in 2022, when 103 of total deals had at least one Vertical Capital Income Fund (VCIF) among the investors, the report said. Ninety-two of these were at the seed stage.

Thus, one out of every three deals included transactions made via VCIF, whose total number is said to be around 300, with as many as 50 of them being active.

Startups.watch founder Serkan Ünsal dubbed venture capital investment funds the hottest topic of 2022. “The number of VCIFs has increased rapidly. At least one out of three investment agreements was made by VCIFs,” Ünsal noted.

“Even if we exclude Getir, we can say that we have broken the all-time record. We need new success stories in fintech. Türkiye having a unicorn in fintech would also be a source of inspiration for the rest of the sector,” he added.

Female founders

The number of startups with female founders in Türkiye seems to be low due to the male weight in gaming companies.

According to startups.watch data, 64 of the total 300 investment deals included ventures that had women among their founders.

Moreover, the proportion of female entrepreneurs among unicorn startups accounts for 50%. This ratio also shows that female founders are more successful among technology startups.

Meanwhile, Istanbul ranked sixth among European cities when it comes to total angel and venture capital deals in 2022, the report showed. London sat first, followed by Paris, Berlin, Stockholm and Munich.

The metropolis ranked second just after London in both the size and the number of gaming deals, followed by Paris, Helsinki and Lisbon, and fifth in the world, the report said.

‘Negative experience’

Speaking at a panel on the sidelines of the event to announce to report, Vestel Ventures CEO Metin Salt said the rise of successful startups is more important than the number of venture capital investment funds, stressing the importance of a secure ecosystem.

“This year’s topic is VCIF. The number of VCIFs is estimated to be almost 300. It is necessary to carefully monitor the establishment of VCIFs. I am afraid that many people who are investors for the first time will have a negative experience. After all, if we want a deeper ecosystem to be formed, we must prevent bad experiences from occurring in the first place,” said Salt.

“The ecosystem cannot grow self-enclosed. I believe in the importance of networking. A self-enclosed ecosystem cannot function. We need to solve the issue of investment abroad. You want investment from abroad to come in and great exit agreements to be made, but it cannot be achieved without you investing outside. We cannot be convincing if we only say that they should invest in us,” he noted.

Salt also noted that investments in early-stage initiatives would continue due to the narrowing of existing financial resources. “However, we need to think about how to find resources for growth-stage initiatives,” he said.

Emphasizing that startups are lucky when it comes to impact investing and that they will be less affected by the current contraction, Salt cited the example of WeWalk, a startup developing a “smart cane” for visually impaired people.

“There are significant funds when it comes to impact entrepreneurship. For example, the WeWalk initiative last received an investment of 9 million pounds ($11.12 million). It is not difficult for impact initiatives to find resources from abroad. But we need to increase the number of such initiatives,” Salt said.

“While making these investments, we took part in the initiative at every stage from production to sales. However, we have learned from the evaluations of overseas investors that this is not a very good thing. Now we are conducting the process differently,” he added.

Important transformation

Also addressing the event, Muhammed Özhan, general manager of TT Ventures, said they have been going through an important transformation since 2018, the year they founded Türk Telekom’s corporate venture capital subsidiary.

“We have been experiencing an important transformation after 2018. We are no longer a corporate venture capital fund. We are converting from corporate venture capital to venture capital. We have now included other investors as well. There are also institutions other than Türk Telekom as limited partners. We have become a venture capital investment fund over time. We have an investment committee with independent members as well. We take decisions unanimously here,” Özhan noted.

He said they are no longer a fund that invests only in the seed and initial stages.

“We continue to make follow-up investments for Series A and beyond. In addition, we are investing in Turkish startups abroad with the new fund that has been formed. We will also evaluate the investment opportunity in foreign startups abroad. Our goal here will be to invest in the right initiatives,” Özhan added.

Cooperation with fintechs

For his part, Işbank Digital Banking Manager Emre Ölçer said they embarked on their journey with the concept of open innovation.


Işbank Digital Banking Manager Emre Ölçer. (Courtesy of startups.watch)
Işbank Digital Banking Manager Emre Ölçer. (Courtesy of startups.watch)

“On the journey, we started in 2016, we achieved the happiness of graduating 100 initiatives in 10 terms. We believe in working together with startups. We could have offered products in loan financing, such as Figopara. However, we wanted to use the advantages of being open to cooperation while paving the way for initiatives. This way, we can focus on our own tasks more easily,” Ölçer noted.

“Since that day, we decided to continue the journey we started at Kolektif House by using the facilities of Iş Towers. We continue our investments through the Maxis Venture Capital Fund. In addition, we also invest in different funds,” he added.

Ölçer said they established the Founderone investment fund with Arya, through supporting women’s initiatives, and nongovernmental organizations (NGOs) such as the Entrepreneurship Foundation of Türkiye for impact investment.

“Thus, we have increased the investments we have made through the venture ecosystem,” he added.

Turcorn 100

Also addressing the event, Industry and Technology Ministry Technology Entrepreneurship Department head Damla Turan elaborated on the facilities and support the government would be provided within the scope of the recently announced Turcorn 100 Program, which targets startups at the growth stage.

“A classical habit would see grant programs included in programs prepared by the government. There is no such preparation this time. This time we have designed something similar to a club structure by considering more advanced stages. Here, we offer a network as one of the things we attach the most importance to. We think that every participating startup will benefit from the relationship network,” Turan said.


Industry and Technology Ministry Technology Entrepreneurship Department head Damla Turan. (Courtesy of startups.watch)
Industry and Technology Ministry Technology Entrepreneurship Department head Damla Turan. (Courtesy of startups.watch)

The Turcorn 100 Program aims at helping Türkiye to get new companies that reach the status of unicorn – startups with a valuation of over $1 billion. Turcorn is how the Turkish government prefers to describe unicorns emerging from the country.

“The Turcorn 100 program has 17 important stakeholders. Türkiye’s Turcorns are supporting the initiatives as stakeholders of this program. We will support initiatives in many issues, including global acceleration programs. After all, we do not expect every startup participating in the program to be a unicorn. What we want is to support every step that will allow for the further deepening of the ecosystem,” Turan noted.

Extensive efforts

Altan Küçükçınar, head of the Venture Capital Assembly of the Union of Chambers and Commodity Exchanges of Türkiye (TOBB), and Deputy Chair Murat Onuk noted meetings and talks with regulatory authorities and ministries that aimed at eliminating regulatory obstacles before the venture capital investment funds and entrepreneurs.

“Follow-up investments and investments at advanced stages are important for startups. We need to find new investment tools for early and seed investors to find new investors who will make an exit agreement. Venture capital investment funds are also a good tool at this stage. If we want the VCIFs to function properly, if we want investors to come from abroad, then the legislation needs to be supportive and the newly joined investor needs to have a good experience,” said Küçükçınar.


Altan Küçükçınar (L), head of the Venture Capital Assembly of the Union of Chambers and Commodity Exchanges of Türkiye (TOBB), and Deputy Chair Murat Onuk. (Courtesy of startups.watch)
Altan Küçükçınar (L), head of the Venture Capital Assembly of the Union of Chambers and Commodity Exchanges of Türkiye (TOBB), and Deputy Chair Murat Onuk. (Courtesy of startups.watch)

It is imperative that the new resource that is created during the period when access to capital is limited is properly evaluated, he noted.

“Among the members of the assembly, there are officials from public institutions. You have to constantly develop new regulations. We are working to find common points on the platform. The public has a lot of weight in Türkiye. As an assembly, we are making efforts for the harmonious work of both sides,” Küçükçınar added.

Onuk, for his part, stressed efforts and works with government institutions when it comes to venture capital investment funds.

“The officials of the Presidential Investment Office, the Finance Office, the Industry and Technology Ministry and the Treasury and Finance Ministry are making sincere efforts. There is a fast-moving process. There are developments regarding the pending legislation. If there are 80 topics we have been discussing, we have solved 40 of them. Now we are also making efforts for others. However, it should not be forgotten that it is more important to establish a flexible structure against new situations that are constantly developing. This is what we are making efforts for,” Onuk concluded.

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