Türkiye has established itself as a hub for technology startups, with six unicorns – startups with a valuation of over $1 billion (TL 18.83 billion) – emerging in the past three years alone. The country’s thriving startup scene is now set to be dominated by a new breed of startups – financial technology ventures or fintechs.

Startups engaged in financial technology, led by payment technology, managed to raise almost $90 million in funding across 34 deals in 2022, marking an all-time high, a report analyzing Turkish startup ecosystem data showed.

The drive has been backed by a supportive regulatory environment and guides that clear the way before fintechs, which attracted around $69 million in 2021, according to the report, prepared by industry monitor startups.watch with the support of the Presidency’s Finance Office.

The capital flow last year saw Param becoming Türkiye’s most valuable fintech firm, given that it raised funding in July at a valuation of $217 million. It thus outpaced iyzico, which was sold to PayU for $165 million in 2019.

Payment technology

The startups.watch report showed 251 of the current financial technology startups are engaged in payment technology. Among others, 92 are crypto money and blockchain-oriented, 89 focus on banking technology and 66 are startups engaged in corporate financial technology. Ventures focused on insurance technology (59) sit fifth.

If a unicorn emerges from among the financial technology startups, it is expected to make a significant impact on others, similar to that of Peak. For this, it is very important that there are initiatives that embark on a successful global journey.

Peak Games became Türkiye’s first unicorn after it was sold to Zynga for $1.8 billion in 2020.

Regulation effect

The fintech startups are waiting for the implementation of the draft regulation after the decisions taken in the field of digital banking. Regulatory decisions contribute to the depth of fintech startups in all areas at every stage.

The obligation of e-invoicing previously facilitated the exit agreement of companies such as Foriba, even causing the birth of the Figopara initiative.

Perhaps each exit agreement could be a precursor to a new unicorn startup. Regulatory decisions have the primary priority for this outcome to emerge.

Param’s long run

Param is a venture that leverages financial technology to bring 63,000 companies in Türkiye closer to their employees, partners and customers. With its wealth of experience, the company has won the support of investors.

Last year, 45 different investors expressed interest in Param during a funding round that helped the company reach a valuation of $217 million.

Since its inception, Param has helped companies in various sectors manage their customer loyalty programs, relationships with partners and dealers, and relationships with professional organizations, all while ensuring compliance with current financial regulations.

According to CEO Emin Can Yılmaz, the volume of transactions conducted through ParamPOS – used by 63,000 member businesses – increased by 175% in 2022, reaching TL 37.4 billion. He also noted that the number of users reached 5 million, the number of cards 7 million and the spending amount TL 9.2 billion.

Yılmaz emphasized that the company had finally reaped the rewards of its hard work in 2022, as he explained the significance of the recent investment.

"We received the industry's largest valuation, thanks to the confidence of our investors. Our first investment round was led by the European Bank for Reconstruction and Development (EBRD) and included participation from CEECAT Capital, Alpha Associates and Revo Capital," he noted.

"With an investment based on a $217 million valuation, Param is now the most valuable fintech company in Türkiye. This success has further fueled our desire to create innovative financial experiences."

Global growth and ecosystem

Yılmaz, speaking about the Param UK brand, stated that in 2023 the company is aiming to increase brand recognition internationally.

"We are not limiting Param's growth aspirations to just Türkiye. Hence, in 2022, we launched our Param UK brand. Currently, Param UK facilitates quick and effortless money transfers both within the U.K. and between the U.K. and Türkiye. We offer support to users in the U.K. who have difficulties opening bank accounts or communicating with traditional banks through our Param UK platform. Soon, money transfers will also be possible from Türkiye to the U.K. with Param TR," he noted.

In addition to enhancing growth and market share in Britain, Yılmaz said they plan to expand into other European countries with new investments.

"Our 'Param Personal' products will provide a comprehensive financial solution for individual users, while 'Param Commercial' will be the one-stop for all financial needs for businesses. The new 'Param Next' service platform will allow for the seamless integration of financial solutions and products, regardless of the business model. 'Param Global' will be a global financial application that will cater to the needs of European consumers, with its headquarters in England and the Netherlands," he added.

TL 15M shared with employees

Yılmaz, underlining the continuous improvement of the human resources vision for Param, also elaborated on the support extended to employees.

"We prioritize the satisfaction and commitment of our employees to the company. At the end of the year, we decided to share approximately TL 15 million, equivalent to 20% of our company's net profit, with our employees. Each member of the Param family is valuable to us, and we will continue to grow with their contributions," he said.

Yılmaz added that they would continue to implement innovative products, services and projects that bring substantial value to their users, as they aim to bring a new dynamic to the fintech sector in 2023.