Ask a VC what his or her dream is, don’t be surprised if the answer is “an exit.” While those of us who put money behind what we believe are promising startups, we do so in the hopes they scale up successfully and get ready to either go public or be acquired. It’s a lot like when your kids go away to college. If you’ve made it that far, you’ve done a great job.
We’re thrilled to announce PayU, a fintech company headquartered in the Netherlands, acquired Istanbul-based iyzico.
We backed iyzico in 2014. Barbaros Özbuğutu and Tahsin Isın, young men born and raised in Germany, were commuting between their homes and Istanbul to build a company to provide an online payment infrastructure to support Turkish businesses. We’d love to tell you that it was “crazy.” The reality is — it was untested — and unheard of. Turkish banks ruled the market. Trying to wedge in between the services banks provided and introducing untested technology that could help Turkish businesses or individual sellers with payments seemed risky, at best.
That ‘risk’ was just what appealed to us, along with the energy and vision that Barbaros and Tahsin possessed. Sure, both were idealistic. And had they been anything more, it wouldn’t have worked. Introducing something new into a market requires persistence and passion. That is exactly what inexperience and idealism engender.
Here’s what else worked:
Listening and hearing: The hardest thing for startup founders to do is listen. It’s counter to their passionate nature and vision. And you need a lot of both to succeed. You also need the ability to step away and see what you don’t and, more importantly, what others see. Barbaros and Tahsin mastered this. Without letting go of their end goal, they sought out and took in advice from us and a variety of others. They didn’t think they knew everything. In fact, they knew that it was important to know as much as possible.
Execution: All startup founders are committed to doing things right. But that doesn’t always mean that they do the right things. Execution requires to focus on both the day-to-day and the long term — and knowing how to balance both at the same time and gaining results. Barbaros and Tahsin mastered that tightrope.
Talent: We’ve talked about this before, but the talent is everything. No one person has catapulted to greatness on his or her own. Hiring the right people, knowing how to tap into their potential, and creating a positive office culture is key. So is knowing when to let people go. Managing people can be as difficult as executing on an idea. But it is as equally critical. If you don’t have the right people, you don’t have success. Barbaros and Tahsin understood this and made it a point to get talent right. And it shows.
Our first investment took place in 2014. After a total of $27 million investment in five rounds, iyzico is Turkey’s largest payment service provider, handling 600x (yes — six hundred times) more volume than the day we invested, with a staff of 150. And they did it in five years — proof that with the right backers, the right talent and strategy — a startup can scale up in a short time, even in Turkey.
Exits are still a new phenomenon in Turkey. iyzico’s accomplishment adds to what we’ll call “so you want to get to an exit?” basket. The lesson they offer is efficiency and focus. Exiting after five years is a remarkable accomplishment. It can be done.