startups.watch 2018 takeaways

Turkey Entrepreneurship System Ali Karabey (212), Atıl Erken (Collective Spark), Metin Salt (Vestel Ventures)

After attending Startups.watch’s Q4 2018 event at Zorlu PSM, we share our thoughts. For those who do not know Startups.watch, is a platform tracking daily investments, developments and news in the ecosystem with reporting and analysis. This article is for all those who could not join the event yesterday. Let’s take a look!

At the Turkish Entrepreneurship Ecosystem’s 3rd Quarter event, Serkan Ünsal, founder of Startups.watch, indicated a 50% decrease in total investments in Turkey compared to last year. According to Q4’s report, the total amount invested in 2018 was USD 59.2M .

Europe, while lagging behind the US, had a record breaking year in 2018. Some of that wave will be hitting our shores surely with recent success stories.

Notably, we see in 2018 an increased number of corporate investors. As of 2018 for every 3 investments made one is a corporate investment. The percentage of corporate investments of the total investment annually increased by 87% from 2017 (16%) to 2018 (30%).

Breaking down the 100 investments made in 2018, we see a new vertical arise, RegTech (regulation technology). The big winner in 2018 to receive investment is again Fintech for the second year in a row. There is talk on the street about possible exits in 2019 in Fintech, SaaS, Mar-tech or Travel-tech.

Turkey falls in line with the general investment trend in Europe. According to The State of European Tech Report, Fintech remained the single largest vertical for capital investment at USD5B in Europe. Again like in Turkey software investments came in second place for the most European investments followed closely by investments in health and transportation.

The State of European Tech Report

We are happy to see, 20% of total investments in 2018 were in two of our own portfolio companies. The best-funded startup was Insider with USD 8M with big global players joining the rounds iyzico having raised USD 4M in 2018 comes in as the 4th largest funded company.

The most attractive financing tools for early stage funding are government grants as they provide 70% of all seed and series A funding in 2018.

In 2017, Turkey took a place in Startups’ watch 1st. League with over USD 100M. In 2018 Turkey dropped to the 2nd. League with lower than USD 100M investments.

Although Turkey’s investments dropped, we reached a record high in total amounts of exits and secondary investments with total 30 deals generating USD 1,417.3M.

In 2018, Turkey’s investment per capita is USD 0.74. Although this number looks nominal, we see great growth potential with 10 Tübitak grants to be awarded in the coming year. In addition, as of year end 2018, several new venture capital funds have closed and are ready to infuse significant investment into the ecosystem.

Looking forward to seeing more investments and exits in 2019!

Cheers.