Ankara, Turkey

The Dynamic Startup Scene in Turkey

By Meriç Çavuşoğlu, Financial Axis Independent Audit & Consulting Inc

The concept of “Startup”, something that was rarely heard of and in which only a handful of people were interested in Turkey at the turn of the 2010s, has today become a paramount part of the country’s technology sector. With its huge young population, surging number of educated people, and increasing levels of internet usage, Turkey has created a very dynamic startup ecosystem over the past decade, during which dozens of new startups were founded, numerous angel investors and venture capital firms emerged, lots of exits were made, and a supportive infrastructure was built with growing numbers of accelerators and beneficial government initiatives.

In 2010, the number of corporate venture capital (CVC) entities in Turkey was only two; whereas in 2019, this number shot up to 26, thanks to the easing of regulations as well as incentives offered to private corporations to establish CVC funds. As for local VCs and investment firms, the first of which was established in 2012, there are now over 70. Many of these investment firms made their first investments in the early 2010s and exited at the end of 2017; they then got on with planning their next investments for the best part of what remained of the decade.1

The deals that these VCs closed, supported by a rising pool of active angel investors, naturally led to a substantial increase in the total value of deals. The total startup equity funding was USD 19 million in 2010, whereas this figure soared to USD 103 million in 2019, and to a record USD 177 million in 2020. Even though the sharp increase in startup fundraising is evident, Turkey’s per capita angel and VC funding is still below USD 2. This figure should be at least USD 10 for Turkey to become globally competitive in the sector.2

Accelerators, which are another pivotal part of a dynamic ecosystem, also saw their number go up in the past decade: the number of active startup accelerators went from six in 2010 to 57 at the end of 2019, an impressive eight-fold increase. Eight of these accelerators, which are exclusive to fintech startups – a sector particularly popular in Turkey – were launched by banks. As for technology parks, which give livelihood to newly born startups, the count more than doubled, rising from 27 to 61. They now accommodate more than 5,000 startups where roughly 50,000 people are employed.

The government also played an important role in the development of the Turkish ecosystem; TUBITAK has been providing grants to idea-stage startups via its programme called TUBITAK BiGG since 2012. In 2019, 568 idea-stage startups received up to TRY 200,000 each, while 823 early stage startups received a total of TRY 123 million. Another government institution that supports startups is KOSGEB, an arm of the Ministry for Industry. When the grants provided to 417 idea-stage and 160 early-stage startups by KOSGEB in 2019 are added on, the government support to startups in that year alone equals USD 32.5 million. Furthermore, since 2013, the Ministry of Treasury and Finance has had an angel investor accreditation programme in place that, as of March 2020, had accredited 524 angel investors, who have consequently become eligible for certain tax incentives.3

Turkey has indisputably covered a lot of ground in establishing a favourable startup ecosystem over the course of the past decade. As a result of this, the country has surpassed the European Union average in entrepreneurial activity.4 All of the above developments have come to fruition with exits that have created great sensations worldwide. Among these exits, some of the major ones are the sales of Peak Games to Zynga for USD 1.8 billion, Yemeksepeti to Delivery Hero for USD 589 million, and Gittigidiyor to eBay for USD 218 million. For all the positives though, there surely are some aspects that Turkey can improve on. Firstly, there is a serious shortage of computer programmers in Turkey. Although there are several initiatives aimed at filling this gap conducted both by the private and public sectors, programming courses should rapidly be incorporated into primary and secondary level education. Secondly, Turkish society still lacks entrepreneurship as an organic part of its culture; the Turkish people should embrace a more benign view towards entrepreneurship and accept it as a legitimate career path for their offspring. Lastly, despite all the government initiatives, Turkish startups are sometimes forced to deal with issues such as prejudice from consumers and grave economic turbulences due to political circumstances. Nevertheless, regardless of whether these issues are addressed or not, Turkey is en route to becoming a larger and more profitable ecosystem, with great opportunities for startups, investors, and global collaborations on the horizon.

Financial Axis provides, in the field of startup development, services ranging from market research to fundraising consultancy to helping startups achieve sustainable growth and internationalisation. They have already partnered with startups in a wide range of industries such as biotechnology, life sciences, automation, textile, retail, and defence in Turkey. They also maintain good communication and cooperation with various startup development funds in Turkey.


Meriç Çavuşoğlu

Meriç Çavuşoğlu

GGI member firm
GGI member firm Financial Axis Independent Audit & Consulting Inc
Advisory, Auditing and Accounting, Corporate Finance, Fiduciary and Estate Planning, Law Firm Services, Tax
Ankara, Turkey
T: +90 312 428 1 444
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Published: GGI Insider, No. 112, March 2021 l Photo: Orhan Çam -

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