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Turkey – VC navigator

The land of opportunities

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Market overview

Review of the market and key statistics

VC List

The table of 130+ VCs, their investment focuses and contacts

Taxes & incorporation

Information on how to launch a startup in Turkey

30%
of all VC deals in MENA are held in Turkey
$1.4 bn
raised by Turkish startups in 2022, almost 10x to 2020
10th
Turkey's rank among startup ecosystems in Europe
90%
of all Turkish startups are based in Istanbul

Introduction

The startup ecosystem in Turkey has witnessed significant growth in recent years, with a rising number of innovative entrepreneurs, a surge in venture capital investments, and the emergence of supportive government policies. As a result, Turkey has become one of the most dynamic and attractive startup hubs in the region, with a thriving ecosystem that offers promising opportunities for both investors and entrepreneurs.

To create an outlook on the market, we researched Turkey's VC and startup ecosystem. Our research provides an overview of the current state of the ecosystem, including its key players, trends, challenges, and opportunities. We also offer recommendations and insights to help investors and entrepreneurs navigate the ecosystem and make informed decisions.

Our research is based on data analysis, interviews with key stakeholders, and a thorough review of relevant literature. We hope that our findings will contribute to developing a more robust and vibrant startup ecosystem in Turkey, and support the growth of innovative and impactful startups in the country.

Turkey has rapidly emerged as a significant player in the global startup ecosystem, with a growing number of innovative startups and a supportive environment that fosters their growth. Over the past decade, Turkey has experienced a significant surge in startup activity, with a growing number of entrepreneurs, investors, and support organizations fueling its rise.

The country's strategic location between Europe and Asia, along with its young and tech-savvy population, has attracted a growing number of international investors and entrepreneurs to its shores.

International venture capital firms, such as Earlybird Venture Capital, 500 Emerging Europe, and Greylock Partners, setting up operations in the country. Turkish venture capital firms such as 212, Revo Capital, and Collective Spark also play a crucial role in supporting local startups.

Market overview

$20.7 bn
Total funding
10x
Growth since 2020
833
Total VC exits
3
Unicorns (see below)

Speaking of the top-funded businesses, e-commerce, fintech, mobile gaming, delivery, and crypto could be defined as the most developed industries.

One of the most popular spheres of startups in Turkey is e-commerce. Online marketplaces, such as Hepsiburada and Trendyol, have become some of the most successful startups in the country, offering a wide range of products to consumers. Additionally, there has been growth in startups that offer online payment solutions, such as iyzico, which has gained a significant market share in the payment processing industry.

Another popular sphere of startups in Turkey is fintech. Turkey has a young and tech-savvy population that is open to using digital financial services, which has led to the growth of startups that offer mobile banking, investment management, and peer-to-peer lending platforms. For example, Ininal and Papara are two popular digital wallet startups that have gained a significant following in Turkey.

Turkey's startup ecosystem has also seen growth in the software and technology sectors. Startups in these industries are focused on developing innovative solutions for businesses and consumers. Some of the most successful startups in these sectors include Insider, which offers personalized marketing solutions, and Segmentify, which provides AI-driven e-commerce personalization services.

However, despite this progress, there are still several challenges that need to be addressed to unlock the full potential of Turkey's startup ecosystem:

– Limited access to funding. Venture capital and angel investors are relatively scarce in the country, which makes it challenging for startups to secure the capital they need to grow and scale.

– Bureaucracy and Red Tape: Turkey's bureaucracy and red tape can pose a challenge for startups, particularly for those looking to establish a legal entity or obtain necessary permits and licenses.

– A lack of guides and instructions on Turkish startup ecosystem, which makes it difficult for investors and entrepreneurs to make informed decisions.​

Editor's opinion on market characteristics

Technical talent (IT, engineering, hardware)

Marketing talent (PR, ads, branding)

Management talent (operations, HR, management)

Pros & Cons of launching a startup in Turkey

Rapidly growing market

Turkey's market is growing with a CAGR of 20-30%, which could be a good market opportunity for many scaling startups

Low English proficiency

Compared to other MENA countries, it could be difficult to communicate in Turkey, starting from business registartion, ending with CustDev

Crossroad of Europe and MENA

When launching in Turkey there is an opportunity to expand both to the west and to the east

Complicated tax system & incorporation rules

Startups don't have many preferences, and registration rules are complicated

High digitalization potential

Many spheres are not yet digitalized – such as real estate management, medicine and logistics, there is still a huge room for improvement

Unstable economy

The ongoing Turkish currency and debt crisis is characterized by the lira (TRY) plunging in value & high inflation

VCs list

This list includes a diverse range of funds that invest in various stages of startup growth and in a variety of industries. From early-stage seed funding to growth-stage investments, these VC funds have a track record of supporting startups in Turkey.

For startups willing to scale on Turkey's market, this list can be an incredibly valuable resource. By having access to a curated list of top VC funds in the country, startups can easily identify potential investors who align with their business needs and goals. With the right funding, startups can accelerate their growth, expand their operations, and bring innovative solutions to market.

This list also provides a valuable opportunity for startups to gain insights into the investment landscape in Turkey. By understanding the different types of investors and their investment criteria, startups can tailor their pitches and strategies to increase their chances of securing funding.

Over 130 venture funds and 30 angels are gathered in the list – start to explore and send your pitch!

Unicorns and soonicorns on Turkey's market

E-commerce
Getir

Getir

A leading company that offers an ultra-fast delivery service for groceries and other household essentials. Customers can order items through the Getir app and receive them within minutes, thanks to the company's network of couriers.

Company's website
ADTech
Insider

Insider

A digital marketing and customer engagement platform that helps businesses deliver personalized experiences to their customers. Insider uses machine learning and AI to analyze customer behavior and provide real-time recommendations for marketing and sales campaigns.

Company's website
E-commerce
Trendyol

Trendyol

A leading e-commerce platform in Turkey that offers a wide range of products, including fashion, electronics, and home goods. Trendyol also provides a marketplace for third-party sellers to reach customers

Company's website
Gaming
Spyke Games

Spyke Games

A mobile gaming company that creates casual games that are easy to play but offer engaging gameplay and challenging levels. The company is focused on creating games that are fun for players of all ages and skill levels.

Company's website
Gaming
Dream games

Dream games

A mobile gaming studio based in Istanbul. The company is focused on creating high-quality, visually stunning puzzle games that are easy to play but challenging to master.

Company's website
E-commerce
Hepsiburada

Hepsiburada

One of the largest e-commerce companies in Turkey, offering a wide range of products, including electronics, fashion, home goods, and more. Hepsiburada has a strong presence in the surrounding regions, with a focus on providing fast and reliable delivery.

Company's website

Taxes & Incorporation

10 steps to register
your startup

Incorporating a startup in Turkey can be a complex process, so it's a good idea to work with a consultant who can guide you through the process and ensure that you comply with all legal requirements.

1. Decide on your company structure

Before incorporating your startup in Turkey, you need to decide on the legal structure of your business. The most common structures for startups in Turkey are limited liability companies (LLC), joint-stock companies (JSC), and partnerships.

LLCs are the most popular structure for startups in Turkey. They require at least one shareholder and have a minimum capital requirement of TRY 10,000 (approximately USD 500).

JSCs are typically used by larger companies that plan to go public. They require at least two shareholders and have a minimum capital requirement of TRY 50,000 (approximately USD 2500).

Partnerships are less common and are typically used for professional services firms such as law firms or accounting firms.

2. Choose a company name

Once you have decided on the legal structure of your company, you will need to choose a name that is not already registered in Turkey. You can check the name availability on the Turkish Trade Registry Gazette website (tobb.org).

The name of your company should not include any offensive or sensitive words, and it should not be similar to any existing trademarks or company names.

3. Prepare the articles of association

The articles of association are a legal document that outlines the purpose, structure, and regulations of your company. It must be prepared in Turkish and signed by all shareholders.

The articles of association should include the company's name, purpose, capital, shareholders, management structure, and other important information about the company's operations.

You can prepare the articles of association yourself or work with a lawyer or business consultant to ensure that they are drafted correctly and comply with Turkish law.

4. Obtain a tax number

Your company will need a tax number to operate in Turkey (check ivd.gib.gov.tr). You can obtain this from the tax office by providing your passport and other required documents.

5. Open a bank account

You will need to open a bank account for your company and deposit the minimum capital required by law. The bank will provide you with a deposit certificate that you will need to submit to the Trade Registry Office.

6. Register with the Trade Registry Office:

Once you have all the necessary documents, you can register your company with the Trade Registry Office. This can be done online or in person.

The registration process typically takes one to two weeks, and you will receive a trade registry number once your company is registered.

7. Obtain any necessary licenses and permits:

Depending on your business activities, you may need to obtain additional licenses and permits from the relevant authorities. For example, if you plan to open a restaurant, you will need to obtain a food service permit from the local municipality.

It is important to research the requirements for your specific industry and obtain any necessary licenses and permits before starting your business

8. Register with the Chamber of Commerce

You will need to register your company with the local Chamber of Commerce to obtain a business registration certificate. This certificate is required for opening a bank account, obtaining business loans, and participating in public tenders.

9. Register with the Social Security Institution

If you plan to hire employees, you'll need to register your company with the Social Security Institution and obtain a social security number. You will be required to make contributions to the social security system on behalf of your employees.

10. Obtain any other necessary approvals

Depending on your business activities, you may need to obtain additional approvals from other government agencies. For example, if you plan to import or export goods, you will need to obtain a customs clearance.

Overall, incorporating a startup in Turkey can be a complex process, and it is important to work with a lawyer or business consultant who can guide you through the process and ensure that you comply with all legal requirements.

This review is supported by these amazing companies

The review is created by:

Kirill Sosnin

Kirill Sosnin

Co-founder at Blank.

Let's discuss the collaboration

I plan to launch more reviews of the underexplored regions, such as Saudi Arabia, UAE or Portugal.

Let me know if you are interested in this or other collaboration.

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