An insight into Startup Istanbul's new $10M fund targeting Pre-Seed startups

Startup Istanbul has launched a $10M Pre-Seed venture fund that is diversified across several different industries in emerging markets to fund tech startups and scaleups from its program's deal flow.

Startup Istanbul is an event and Seed investor for tech startups that has been running for the last decade. They have made prior investments and are now converting into a fund in order to invest in startups that have participated in the event. Tim Draper and other prominent investors have joined as LPs.

The Startup Istanbul Fund plans to invest $50K per company in a total of 100 companies, over 3 years. The Fund will have a 25% follow on funding reserve and will aim to be deployed across approximately 25 companies.

Over the past 10 years, 700 startups and scaleup from more than 60 countries have pitched on the Startup Istanbul stage, with the companies raising more than $260M in total funding.

Burak Buyukdemir, Founder and Managing Partner of the Startup Istanbul Fund has invested in more than 100 Pre-Seed stage startups in the acceleration program. We took the opportunity to catch up with Burak to delve deeper into the new fund. Check out the interview below:

What were the main drivers for creating this fund and why is now the right time?

The amount of funds invested in early-stage companies decreased in 2020. We strongly believe in founders and therefore believe we should support talented entrepreneurs to access finance globally. 

Will this new fund shift the way in which you pick participants for the event? 

Startup Istanbul has been a leading startup event, raising a pioneer Pre-Seed stage fund. Startup Istanbul's physical event will be back when the pandemic is over. We will invest in startups on stage when they present themselves. Next year we will start investing online. 

How will the fund work? Can all participants pitch to you or will certain requirements need to be met? 

Startups applying to our event will be eligible to pitch their startups to all investors and also our fund. We will invest initially at the Pre-Seed stage tech companies $50K (on average per company) in 30 startups per year. We will reserve sufficient follow-on capital to invest in 25% of these companies into 2 following rounds. 

We use our platform to evaluate startups and track their progress every year. Our accumulated data enables us to find high correlations with their applications and performance. We have also created an algorithm to spot strong opportunities and also monitor all companies' progress.

Why are you focused on Seed-stage startups?

Startup Istanbul events create value for early-stage startups and our fund will focus on this vertical. We have been a leading event and Seed investor for tech startups in Turkey for the last decade. We have made investments and now we’re converting into a fund so limited partners can participate. We know the struggles of these startups who want to be successful and a global player in developing countries.

What support will you provide to your portfolio companies?

- Connect startups with the right people and organisations to unlock new opportunities and create synergies to grow their businesses.
- Take advantage of our worldwide network to discover new connections, PR, and business development.
- Support portfolio startups in identifying the most relevant funds for their next rounds.

What tips would you give to fundraising startups?

Every economic crisis creates opportunities for innovative startups. Making connections, looking for opportunities and other strategies can help foster resilience for the founders.

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