The coronavirus has adversely affected the global economy, leading to new priorities to emerge in investments in the venture ecosystem. Startups focused on hygiene, efficiency, savings and high technology use have continued to receive investments in this challenging period as the investors and startups have begun turning their attention to changes that will be permanent in new developments in this period. This effect can be seen in three investments in Turkey. Nanomik, a domestic biotechnology startup that aims to prevent food waste with its natural food preservative; TatildeKirala.com with the family-special holiday and hygiene trend, and Yolda with the efficiency in the logistics sector continue to attract investments. It is also noteworthy that the investments generally composed of follow-up investments.
New trends
Many startups in the venture ecosystem are trying to find a way out for the post-pandemic era. Some startups attract investors due to business plans that are in line with changing trends. People and countries that are afraid of the second wave of pandemic continue to keep the issue of hygiene on the agenda. The effect on mask use and hygiene in public areas is expected to be valid in 2021 and beyond.
In the normalization period after the outbreak, the issues of cleaning, modification and hygiene in the offices appear to remain prominent. Armut.com shows that the demand for cleaning and hygiene in the offices has erupted with the onset of the normalization process.
Office renovation and cleaning
According to data from Armut.com, one of the fastest-growing technology companies in Turkey, since the beginning of May, service requests for cleaning and architectural arrangements, especially in open offices, have doubled. While the demand for services from architects and interior designers for office arrangement intensifies, office cleaning and disinfection services are also on the rise. Compared with the previous period, the first 25 days of May saw a 66% increase in demands for interior designers, while the demand for architects surged by 78%.
While there are architectural demands for services such as office partition systems and desk separators, there is also a high demand for services such as paint and whitewash. The demand for office cleaning skyrocketed by 102% as employees gradually return to offices. Similarly, demands for disinfection services in offices also surged by 36%.
Natural preservation from field to table
Nanomic Biotechnology, which ensures the preservation of foods by natural methods and proves that the use of chemicals is not mandatory for long-term preservation of food, eliminates price pressure by providing access to healthy food. Having received seed investment in the Big Bang event organized by ITU ARI Teknokent, the startup was founded by Arda Örçen and Buse Berber Örçen.
Lastly, TRANGELS, which previously invested in Nanomik, made a follow-up investment of TL 1.8 million ($263,610). “We continue to support Nanomik Biotechnology Co., which we added to our investment portfolio in 2018, as we climb the ladder of success. Founded by Buse Berber Örçen and Arda Örçen, Nanomik develops natural preservatives that increase the shelf life of agriculture and food products,” a statement by TRANGELS said.
“With its patented microencapsulation technology, Nanomik Biotechnology provides natural solutions to the producer at different production and application stages from the field to the table, making the molecules of vegetable and microorganism as effective as chemical preservatives. We are pleased to make a total follow-up investment of TL 1.8 million in Nanomik Biotechnology, together with our TRANGELS and Investors Group members, on the second investment tour,” the statement added.
Digital operators for logistics companies
Logistics operations are mostly managed on paper. However, developments after COVID-19 have deeply affected the logistics industry. It is very difficult to follow the transports with the usual methods, take delivery documents or measure the success of the operation. Digital logistics startup Yolda combines the technology and data analytics it has developed with logistics infrastructure and supply chain expertise to solve the problems of logistics operations.
Founded by Volkan Özkan and Murad Özsert, Yolda defines itself as a “Digital Logistics Operator.” Stating that they aim to improve logistics operation processes, the founders want to lead digitalization in the sector with the technologies and solutions they have developed. Thanks to the smart capacity management developed by Yolda, partial shipments are managed with minimum transfer, thus reducing both damage rates and costs and optimizing delivery times. Since Yolda has an agreement with many local transporters and logistics companies, small and medium enterprises (SMEs) and corporate businesses can receive instant answers to multiple different transport requests on a single platform. The companies can also track their transports via the control panel and measure their logistics operations performance with Yolda's detailed reporting service.
The startup provides safe and efficient execution of logistics service from the construction machine to the loads that should be sent in the cold chain. In other words, it provides a marketplace platform for logistics companies to manage efficiently. Yolda, which received a pre-seed investment of $830,000 from Barbaros Özbuğutu and European investors led by Collective Spark, contributes to the digital transformation of the industry.
Many well-known angel investors from abroad and Turkey participated in the investment tour led by Collective Spark. Among the announced investors are Özbuğutu, the founder of iyzico, which provides secure payment solutions to thousands of e-commerce ventures in Turkey, Runtastic founder Florian Gschwandtner, N26 and iyzico investors Marcus Mosen, and Stefan Kalteis who invested in successful startups such as SumUp and Payworks.
Yolda, which provides services for transportation operations from Istanbul to 80 provinces and 922 districts, aims to expand its team with investment and to improve automation and operational efficiency by developing new generation technologies.
“Yolda's marketplace service offers a creative solution to partial and other types of transportation issues, and we believe that this solution will be an important step toward the digitalization of the logistics industry. Yolda, which aims to grow abroad after Turkey, is our ninth investment in our second fund,” Atıl Erken, co-founder of the Collective Spark Fund, said.
Fear of hygiene lead families to individual options
Families and small groups that plan to go on a holiday once the pandemic ends have started to rent boats or villas. This changing trend has enabled TatildeKirala.com, an online marketplace and hospitality service, to receive a new follow-up investment from Sintek Group Chairman Onur Atakay with a valuation of TL 20 million. Founded in 2018 by Ruşen Mat, TatildeKirala.com is expected to quintuple its valuation and use the follow-up investment from the Sintek Group company with a valuation of TL 20 million in growth to meet the increasing demand.
Along with the serious increase in demand in the villa and boat rental market despite the difficulties experienced in the tourism sector after the pandemic, the new investment will be used in 2020 and 2021 for the development of their technological infrastructures, as well as efforts to accelerate branding processes and increase business partners. The platform, where hygiene and cleanliness are prominent in every announcement, aims to respond to changing priorities.
No place for mistakes in e-commerce
After the outbreak, many manufacturers and retail sectors were caught off guard. Significant risks await those who step into e-commerce quickly. Sherpa founder Yakup Bayrak explained the road map and the mistakes made to the institutions.
During the pandemic, retail companies and producers had a hard time. Those who fear the second wave have gained momentum in search of a new channel thanks to e-commerce. In this period, institutions that wanted to make quick decisions also made mistakes. However, it turned out that they needed a serious road map. It is possible to quickly lose the reputation obtained in the traditional environment for long years in the digital world. Therefore, it is imperative to design the customer experience as a continuation of corporate reputation. Sherpa, founded by Bayrak seven years ago, is a startup that enables organizations to create correct usage interfaces for the customer experience journey in the digital environment and ensure continuity in this regard.
Emphasizing the mistakes made by institutions that want to create an e-commerce alternative, Bayrak points out that acting in panic and saying "Let's quickly create a digital sales channel while the nation is at home. At least we will start selling from there" lead to bad results.
Create a road map
When asked, "What is the correct road map?," Bayrak stressed that we should face a simple truth and start work by saying, "If we are talking about this now, we are late in one way or another." He says it is necessary to ask the following questions, without causing despair and saying, "There is nothing left to stop us anymore to get started."
“Do I have to sell from a digital channel? Do I have to sail in that direction just because ‘You have to sell it from digital, the wind is blowing too hard'? Maybe I can increase and strengthen the scope of my digital channels and then improve my traditional sales,” Bayrak said. “Are the operational processes in my business defined and ready to sell my products or services through a digital channel? Are my team and their toolsets ready to communicate through a digital channel, or rather in a nonhuman world? Here is how accurate you give the correct answers to these questions, it will be possible to minimize the mistakes made.”
New facts
“COVID-19 will surely go away. As soon as it ends, a new life will begin,” he said and drew attention to things that should not be forgotten about the normalization process.
“Maybe no one will be able to go back, although they will remain loyal to some old habits, neither you, the business owner nor your target customers. What matters is not the mobile e-commerce, mobile website or mobile application. The user is the one who is mobile. The user, who is content with consuming content while being mobile in the pre-COVID-19 period (and) feels comfortable in this area, will be more mobile and bolder and expand the comfort area and ultimately the consumption range after the pandemic,” Bayrak continued. “The sooner businesses decide to invest in digital sales channels, the more they understand that they need to empathize with the mobile user to understand them, the more likely they will be to choose them. What is sold through the traditional or digital channel before or after COVID-19 is an experience. You should bear in mind that you will lose under any condition if you do not invest in the experience.”
New acceleration opportunities for entrepreneurs
Eighth-period applications were opened in startup acceleration program PİLOT launched by Turkey's leading information and communication technologies company Türk Telekom to support its technology startups and to cooperate with them, to offer innovative products and services to its customers, as well as to support domestic and national startups. Applications can be made on www.turktelekompilot.com.tr.
TL 150,000 for each startup
In the new period of PİLOT, TL 150,000 in cash support will be provided for every startup accepted into the program, while the startups will have the opportunity to cooperate with Türk Telekom. Besides, the startups will be provided with access to a large mentor network, major investors and Türk Telekom's business connections, as well as the office area, technology infrastructure, mobile communication package, promotion and accommodation support for teams participating in the program from outside the city. The areas to focus on within the scope of PİLOT are education and health technologies, artificial intelligence, machine learning, virtual or augmented reality, internet of things, big data analytics, blockchain, financial and regulation technologies and cybersecurity.
The startups that apply to the program are evaluated according to criteria such as cooperation potential, innovation and applicability of the idea, size and growth potential of the targeted market, consistency of the business model and competence of the team.
