Melih Ödemis. Entrepreneur and Angel Investor. Series of interviews with investors in Turkiye n°13.

I love going to Kanyon and work at Joint Idea, at the floor above the cinema. Kanyon is the first mall in Istanbul I visited and Markus Lehto was the project manager at that time, now the co-founder of Joint Idea. Not just a coworking space, more a like-minded club of people who strive for a positive impact on their surrounding world. Philosophy goes hand in hand with technology and art and all beautiful things. While doing some research on Melih, I off course also checked on his partners. When reading some info on Nevzat Aydin I remarked something I have been thinking about a lot. Nevzat describes himself as the founder of Yemeksepeti. Somehow it sometimes seems difficult for founders to write down co-founder. Even myself I sometimes write founder, although I co-founded Stage-Co with my wife and partner Neşen Yücel. Melih was clear in his story. He was the co-founder together with Nevzat, Cem and Gokhan. As always the start was not just 4 kids sitting together in a room like in the Silicon Valley soap. Melih’s modesty will stay present throughout the whole interview.
 
Melih is the son of a Jewish family, based in Istanbul, where the father and the uncle had their own business. At 19 years old he loses his father. His mother continued the business next to raising her kids. He enters Bogazici University with a very high score and ends up following Computer Engineering. He was already playing with video consoles and was attracted by the digital wave. His mother continued the textile atelier from ’96 and managed it till 2004. Very brave woman indeed. It was also clear for Melih at that time that he had to take care of himself. In ’95 ISP came and there was internet at home using ICQ to talk to the high school friends. Funny thing is that ICQ was build by Mirabilis, in Israel, by 5 co-founders with Yossi Vardi amongst them. Yossi is today a celebrity in the startup world and a bit like the father of all tech startups. After 2 years they sold ICQ to AOL for 400 million dollars, and an inspiration for Melih.
 
After his studies he goes first for the classic security job at Citibank. That only took 1 year as in the meantime new ideas were forming in his head to do something on his own. He met Nevzat in ’96 at the diving club BUSAS at Bogazici University, where they became friends. Ways split but they come together again in 2000 at the South Campus discussing ideas. Yemeksepeti was one of the ideas they talked about. They visited some restaurants to understand the potential. The friends decided to give it a go after they all agreed Yemeksepeti was a good idea. Nevzat gave up his MBA and Melih his job. Yemeksepeti started with 4 partners after Melih told his boss at Citibank he quits. Melih developed the software that ran with tons of additions till 2009. There was a little reshuffle in the beginning, ending in 3 partners in execution and 1 partner supporting with money, Gokhan. Cem did the sales. In 2001 they opened the website with 26 restaurants in the mid of the crisis in Turkiye. The big boost came in 2004–5 when there was broadband.
 
In 2003 there was still no salary but after a PHD attempt, and while in army suddenly he had 500 to 800 USD monthly on his bank account. Happiness rose as in 2005 he found 35.000TL on his bank after finishing his army duty. He could finally move out to his own place and buy his Toyota Corolla. This was after 5 years of hard work. Rock’n Roll I say. In 2006 they moved to their 4th office with a staff of 30 people. Investors were knocking on their doors. The founders of Rocket Internet, the Samwer Brothers, with their first fund called European Founders Fund, were one of the first foreign investors. In those days Rocket was living up it’s name. And as you will read further, their investment in Yemeksepeti was a good one. They invested 3 million USD. The founders in the meantime were nominated and awarded everywhere, one of the first visible big startups “avant la lettre” in Turkiye. Endeavor picked them up as high potential in 2007. Yemeksepeti was at that time active in 5 cities. In 2009–10 the economy was doing good and we also had another Rocket diamond shining: Groupon. Also Markafoni was high performing and the sale of Gittigidiyor to Ebay. Investment came mainly from outside Turkiye. Yemeksepeti grew international towards Russia and Dubai in 2010 and another big investor came in, in 2012, General Atlantic with 44 million USD. The company grew and more acquisitions were made. It was very nice to mention Korhan Ercin as their first professional sales manager, who replaced Cem in 2009, because Cem didn’t want to live the startup/Istanbul life anymore. He is still there and I actually met Korhan before Melih as my wife knows his wife from university. Korhan is a beer lover, he knows as much or even more about Belgian beers than me, and a cartoon lover AND maker! A real artist and I hope one day he will do that full time. In 2012–3 friction appeared between Nevzat and Melih and as a result he stepped down as CTO but stayed as shareholder and board member. At this time Melih also married and divorced in 1 year. This illustrates perfectly how rough partnerships can be. I experienced something almost identical, but with my brother being my partner. Tough days that surely make you stronger, with a serious scar on your soul. Not too many entrepreneurs will like to expose this. It takes balls.
 
In short he got married in 2015 after his second wife told him to make his dream trip first in 2014; 8 countries, 25 stops in South America. In the meantime Yemeksepeti is a profitable company exploring ways to grow and increase profits. To cut the story short. Team Europe Ventures — a company builder based in Berlin — started Delivery Hero. Rocket Internet started Food Panda in 2012 in Asia first, and expanded into west. After growing independently, Food Panda and Delivery Hero started trading companies / countries for the sake of their profitable businesses Finally Rocket became an investor in Delivery Hero and recently sold Food Panda to Delivery Hero. Of course Melih and his partners were a bit surprised by this move. At the same time other big players in the world were also growing, potential competition for Yemeksepeti. Think of Just Eat that went IPO in 2014, they were founded in 2001 just like Yemeksepeti, at a value of $2.44 billion. Just Eat kicked off in Denmark with a home market of 5.6 million inhabitants. Turkiye almost 80 million. End of April, in 2015 white smoke came out of the chimney and Yemeksepeti was sold to Delivery Hero for 600 million USD. This meant a X40 for Rocket Internet and X6 for GA (in 3 years). Good news also for the employees as there was a redistribution plan in place so all employees got a piece of the cake. End of the story and a remarkable play of Rocket Internet.
 
Melih joined Galata Business Angels and invested already 2 million USD in 30 startups, early stage. Half through GBA, half through direct contacts. Startups are not only from Turkish soil, also in Israel, UK, Switzerland, etc. He also invests in funds like Endeavor Catalyst and 500 Startups. Melih is able to give all details with numbers and dates all through the interview. I am very amazed by that. Although it seems normal, of all the companies I founded I could not tell anymore the specific dates and numbers. He is modest, detailed and knowledgeable. I assume he is next to investor also a good mentor.
 
When we touch the startup scene in Turkiye today he recalls that Turkiye enjoyed a great time after the 2008 crisis with a reverse brain drain from 2009 to 2013. After Gezi this stopped and now we see again a brain drain that is increasing every day. Even in my own network I see this. The result is that everybody is getting afraid to start or invest in Turkiye. On top of that the international competition is growing. Just copying and translating to Turkish is not enough anymore. He likes to refer a quote of Reid Hoffman, Paypal VP before eBay acquired and cofounded LinkedIn among others. Think big, start small and act fast. Preferably in English. And in my humble opinion, having a Turkish name as a company with worldwide aspirations is kind of undermining your valuation, but that is my opinion strictly. He likes to refer to Insider as one of the promising startups in Turkiye. They are expanding at a rapid pace and well funded. Melih joined all rounds. Also the efforts of 500startups are very much appreciated as it gave a new boost to the local investors. This brings us back to the startups. Talking about what qualifies for him as good startup teams he distinguishes the following: the team must be hungry, business wise; should be able to survive; money goes to the business. You will remember how Yemeksepeti started. Indeed, bootstrapped. As criteria he further puts on the table passion, a complementary team, experience, defined market and good timing. Melih likes the “neden” or “why” question a lot. I am sure he learned the value of it during all these talks with investors. The why question is on one hand the most easy one but also the most appropriate one. I am sure they couldn’t answer all the why questions when they started Yemeksepeti. But you learn the hard way and Melih is not easily satisfied with the superficial answers. He likes to dig deep as you know.
 
According to Melih there is still room in the e-commerce space although he sees a backdrop for now. On the other hand he is hopeful as a new generation is taking over. He detects enough talent but still the deal flow is too narrow. Think and act international is important but be strong in your home market. When he sees tech startups he lacks the commercial mindset. Too much focused on product. Still he always comes back to the actual situation of the country undermining initiative and eagerness. It is quite obvious when you look at investments, almost zero from outside Turkiye with startups that mainly focus on the home market. This trend will probably not change in the near future. While Turkiye suffers from high inflation, political uncertainty and a legal framework that needs to be updated since long. Most Turkish investors still invest in real estate and foreign investors are waiting for stability and legal certainty.
 
So Melih is 40 now, happily married, one cute daughter, and he did his dream trip already. What’s next to make the man happy? Do things I like is the answer. Could hardly imagine another answer but his eagerness to stay involved in the startup scene remains. I guess he likes to invest in persons/teams that resemble himself. He loves passion and drive. That feeds him. So helping a hand through investment and guidance comes naturally. Focus, focus, focus. You can feel that he likes to dig deep and take it by the root. I guess that is the engineer in him. They love to go to the root cause and solve the damn thing.
 
Piece of mind together with family is for Melih happiness. He has plans for his family but I feel that might not be here. He is feeling not so great with the uncertainty Turkiye represents today. For the business part he keeps going for challenges and impact. I also think it is addictive that, when you once created a platform that has attracted millions of users, you want to do that again. Like Reid Hoffman for example. Melih is very talkative about his past business history but when it comes to him as a person he is more introvert. He is definitely a doer, preferable behind the curtains. He is a great guy to talk too and I am sure he is a great partner when he invests in your startup. Keep an eye on him!

Investments:

Intelligent Textures, Israel, 2010, Active; Kurdele, Turkey, 2011, Failed; Boatbookings, UK, 2011, Active; Gideros, Turkey, 2011, Exited; Pembepanjur, Turkey, 2011; Active; Giysicini, Turkey, 2011, Failed; Joyfoodz, Turkeyi; 2012 Failed; Insider (SociaPlus), Turkey, 2012, Active; StilSOS, Turkey, 2012, Failed; Anlatsin, Turkey, 2013, Active; VitrinNet, Turkey, 2013, Failed; OpenXO, UK, 2013, Failed; Woto (CloudPage), UK, 2014, Failed; Prisync, Turkey, 2014, Active; Faveeo, Switzerland, 2014, Active; HizliCeviri, Turkey, 2014 Active; Dekopasaj, Turkey, 2015, Active; Pakolino, Turkey, 2015, Active; TekKredi, Turkey, 2015, Active; WelcomePickups (Dopios), Greece, 2015, Active; Sealights, Israel, 2015, Active; KolayIK, Turkey, 2015, Active; Etkinlikcim, Turkey, 2015, Active; buldumbuldum, Turkey, 2015, Active; Bulldog, USA, 2015, Exited; PAYPAD, Turkey, 2016 Active; Cayci , Turkey, 2016, Active; Pockee, Greece, 2016, Active; KapGel, Turkey, 2016, Active; iyisahne, Turkey, 2016, Active; Otsimo, Turkey, 2016, Active; Fitwell, UK, 2017, Active; Garajsepeti, Turkey, 2017, Active; Nymbl, UK, 2017, Active; Jetract ,Turkey, 2017, Active

Patrick Bosteels, Stage-Co Co-Founder

patrick@stage-co.com

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