Insights on the evolution of Turkey’s startup ecosystem

Following the launch of our H1 2020 Turkey Venture Investment Report, our CEO and Founder Philip Bahoshy hosted a session with some of the local startup ecosystem's key stakeholders to discuss key trends from the report, and what the future holds for the Turkish startup space.

The webinar's panelists featured, Ilker Kılıç - Consul General of the Republic of Turkey in Dubai, Enis Hulli - General Partner, 500 Istanbul, and Ersoy Erkazanci - Dubai Correspondent at Bloomberg. 

Check out the full discussion, and watch the Webinar below:

Key insights shared:

- There is an oversupply of talent in Turkey, which can be reflected in the number of exits in the country
- Several startups are using Turkey as a Technology Hub
- Fintech is a large industry in Turkey, it is surprising not to see it in the top 5 industries of the H1 Report
- Investments in deep tech increasing is a positive sign
- 10 years ago, investment in Turkey was dominated by international VCs, but since 2012/3, local investors have jumped into the market
- Larger rounds are led by international investors, but in Seed/Series A rounds, local funds and angels are investing. International VCs should participate in more Seed stages
- Capital invested in the country seems to have remained level over the past 10 years
- In the last 3-4 years, government support, subsidies, and grants are increasing
- The government is aware of the expanding ecosystem and need to produce and export technology to have a better future and income
- The Turkish Trade Centre in Dubai helps to set up and pay for 75% of rent and marketing costs
- The initial Turkish success stories were local powerhouses, many of these tried to market in MENA, and failed, potentially due to cultural barriers
- In order to scale to MENA, Turkish startups need to understand their position and scale to countries similar to Turkey e.g. Romania/Poland first
- Angel investments in the country may have increased due to an uptake in ‘smart money’
- Zynga buying Peak Games was a big event and put the spotlight on Turkey
- A lot of corporate investors are entering the game e.g. banks are leveling the playing field
- Older VCs are creating second funds and newer VCs are being created - the ecosystem is maturing
- To get to a larger fund size, you need institutional capital and to create a local fund of funds - the government is working to bridge the gap


Turkey's average deal size was up 250% in H1 2020 to $2.8M, indicating the shift of investors' focus towards later-stage startups. Discover more trends and insights in MAGNiTT's H1 2020 Turkey Venture Investment Report.