The Turkish Investment Story — From Funding to Exit
An ecosystem is a complex network of organisms working together in a physical environment. For an ecosystem to start and sprout you need a seed. From that seed comes a tree, and from that tree comes many other elements.
The Turkish venture capital and angel ecosystem started in 2010. The founders here at 212 helped to plant some of the very first of the funding seeds. In Turkey, that ecosystem began with the first angel group, where Ali and Numan were among the founding members. The Turkish technology investment landscape evolved dramatically for the next 9 years.
212 has been here for the whole development of the ecosystem along with the growth of several wildly successful companies. For the ecosystem to mature it needed global institutional expertise to help companies to move from small locally minded startups to the global institutionalized organization. To do this, a company needs the right advisor and smart capital investment and so begins the story of 212 and the growth of the Turkish technology industry.
After 212’s incorporation in December 2011, significant and steady growth of angel and venture capital funding was pumped into the startup scene.
For the 5-year investment period of 212’s first fund, from 2012 to 2017, the capital invested in the ecosystem grew +500%. 212 injected more than 19% of the investment in 2012 alone and continued annually thereafter to make significant contributions to the invested capital. For one fund to have such a significant percentage of the total funding in a year for a whole country is poignant.
212 is moving the dial for the Turkish startups to move to the big leagues. 212 not only brings the initial capital but also attracts the much needed downstream capital from funds outside the local Turkish ecosystem. Without foreign investors moving into the Turkish ecosystem it will be nearly impossible for companies to expand out.
Because of the differences in culture, business practices, language and market, it’s very difficult for outsiders to successfully invest in Turkish startups. Both Turkey and the greater MENA region play by different rules and a locally-minded venture capital fund with a global sensibility brings great power to these untapped startups with global potential.
After 212 invested in Hemen Kiralik the direct competitor to AirBnB, HomeAway partnered with the startup. With 212’s investment into Solvoyo came a big European VC, 3TS.
212 has not only introduced new investors to the environment but it also helped sprout other leaders into the ecosystem. Rina Onur, a star player in Turkey’s tech scene, also a co-founder at Hemen Kiralik, went on to bring 500 Startups to Turkey. She has continued to add incredible value and through 500 startups is one of 212’s co-investors as well.
In 2014, 212 invested in one of the most important startups in the technology ecosystem, iyzico, the payment provider platform that enabled the fast and easy growth of e-commerce in Turkey. 212 invested before iyzico had its government approval. With 212’s funding and direction, iyzico was able to stay in the game, establishing itself as the leading payment solution in Turkey. With the establishment of iyzico big global e-commerce players entered the Turkish market, H&M, Zara, Amazon, and Alibaba to name a few. 212’s trusted advice helped iyzico establish its early team that has stayed with them and moved the dial for the company from a small startup to a significant exit.
212’s continued contribution ignites the growth of Turkish startups and catapults them into the global arena. Global investment players expect a standard of operations and 212 works hand-in-hand with founders to bring them to a global standard. As of the first quarter of 2019, 212 infused 36% of the total funding.
With 212 ‘s financial investment also comes a global stamp of approval. Along with capital, 212 invests significant sweat equity into each company. The partnership of 212 with the founders aligns the company to meet global investment standards, enabling them to attract foreign investment.
212 has funded 2 of top 10 venture capital transactions in Turkey, iyzico, and Insider. 212 first invested in iyzico in 2014 and in Insider in 2016. In both instances, the next round’s investments were large international players. iyzico accepted investments from IFC, Endeavor, Vostok, and Amadeus. Just two years after 212’s initial investment, Insider brought on board Sequoia Capital.
Institutional investment from the likes of 212 and other players are a catalyst for growth; with faster growth comes faster exits. On average the time from initial investment to exit with+100m valuation is 10 years in Turkey. iyzico exited in record time within 5 years and a +5x return.
Since the ecosystem’s sprouting from early 2010, the top ten exit valuations range from Arvento at $50m to as high as $728m for Trendyol. We are proud to be a part of one of the greatest top 10 exits in Turkey with Iyzico at $165m exit valuation.
212 expects to see even greater growth and more exits in the coming years. Having raised the second fund and already invested in two startups, 212 is still actively contributing as a growth catalyst in startups and the ecosystem alike.
