Startups in Turkey raised more funding last year than ever before as 2021 turned out to be buoyant for the ecosystem not only in the country but across the world.

Angel and venture capital funds handed out more than $1.55 billion in cash to Turkish startups last year, shattering previous records, according to startup monitor startups.watch data announced this week.

The size of the total investments rocketed 948% year-over-year and was up 47% in terms of the number of deals, according to the data which was announced at an event in Istanbul attended by startup ecosystem representatives.

Globally, investments in startups almost doubled in amount throughout 2021, shattering the previous year’s record.

Turkish grocery delivery app Getir alone accounted for around $983 million in the year that saw it become a unicorn by reaching a valuation that exceeded $1 billion. In contrast, it had raised only $38 million in all of 2020.

Even without Getir’s performance, the total amount of cash handed out to Turkish startups would still leave behind all the previous years and amount to $569 million, marking a 284% year-over-year increase.

Valued at $7.7 billion last year, Getir is now reportedly on the brink of raising capital in a funding round that will see its valuation clinch $12 billion, turning it into a decacorn, a term used for ventures that exceed the $10-billion threshold.

If it successfully concludes the new funding tour, Getir will become the second most valuable startup from Turkey, after Alibaba-backed e-commerce platform Trendyol, which hit $16.5 billion last year.

Dream Games also became a unicorn in 2021 after raising $205 million. The latest funding round this week was alone enough for the mobile gaming startup to exceed the previous year’s figure. It announced on Jan. 18 that it raised $255 million from investors, almost tripling its valuation to $2.75 billion in little more than six months.

The funding round took the total funds raised to $468 million since its founding in 2019. Dream Games raised $155 million, valuing the company at $1 billion in a previous funding round, it revealed in June.

Among top 10 in Europe

The shining star of the past couple of years, the Turkish gaming industry clinched $265 million worth of funding through 52 investment tours in 2021, with valuations surging 80% year-over-year.

Two weeks into the new year and only two deals were enough to exceed this figure. Adding to Dream Games’ $255 million, casual gaming startup Spyke Games raised $55 million in a seed round of funding this week, taking the overall size of investments received by the industry to $310 million.

Investors joined 44 of the total 294 funding rounds completed in 2021, according to the data.

The buoyant year also placed Turkey among the top 10 countries in Europe receiving the most investments. It ranked second in the Middle East and North Africa region. Yet, it still seems to have a long path ahead when it comes to investment amount per capita.

Istanbul

According to the startups.watch report, also long supported by Türk Telekom, one of Turkey's leading information and communication technologies companies, the country’s metropolis has maintained its rise in the venture ecosystem.

Istanbul ranked 13th among European cities receiving the most investments and fourth in terms of the number of deals clinched in 2021. It alone accounted for $1.49 billion of the overall amount and for 218 rounds.

It came in second just behind Tel Aviv in the Middle East and North Africa region and managed to surpass Dubai for the first time ever.

Institutions and corporate venture capital firms attended nearly one of every three funding rounds throughout the last year.

Female entrepreneurs were present in only 40 of the total 294 investment tours, continuing a low course in 2021 as well. This is mostly attributed to the fact that the rate of female entrepreneurs in the gaming sector is very low.

In 2021, investments in startups hit $643 billion globally, according to the startups.watch data, a 92% year-over-year increase from some $335 billion in the previous year.

The United States alone accounted for about half of the world’s funding total, with startups in the country raising about $330 billion, according to the report, marking a 98% increase from the year earlier. The country saw around 820 mega-investment tours, worth over $100 million, throughout 2021.

State among biggest supporters

Some 18 new funds were established in Turkey in 2021, the report said, as the size of the funds set up between 2017 and last year reached $850 million.

TechOne was named the most active venture capital in 2021 as it completed 14 investment rounds. Alesta topped the list among corporate venture capital funds with 22 investments, while Keiretsu Forum ranked first among angel investor network with investments in 19 startups.

Among others, Turkey’s first equity-based crowdfunding platform, Fonbulucu, also scored a major success as it invested in 18 startups. On the other hand, the Technological Research Council of Turkey’s (TÜBITAK) Individual Young Startup (BIGG) platform turned out to be among the largest funding sources for startups in the idea stage.

Human quality factor

Addressing the Turkey Startup Ecosystem annual event, Turkish Presidency’s Investment Office Chairperson Burak Dağlıoğlu stressed Turkey’s entrepreneurs and highly educated people as the country’s main investment advantages.

"Human quality constitutes the biggest difference when Turkey is receiving an investment. The entrepreneurial spirit of the founders of Trendyol, Getir, Yemeksepeti, gaming startups such as Peak, Dream Games and the human quality attracts the investor’s attention. And the unique location that Turkey also gives a significant advantage to those who want to do business in the region," Dağlıoğlu noted.

"The interest in values that Turkey owns is growing more and more every year."

‘Briliant ideas’ take the stage

Zorlu Holding’s in-house entrepreneurship platform Parlak Bi’Fikir (A Brilliant Idea) has been a growing program supporting innovation and creativity.

Elaborating on the platform, Vestel Ventures General Manager Metin Salt stressed the eagerness of the "employees to catch up with us everywhere and tell us the ideas they had."

"An innovation-oriented business culture that encourages creativity and innovation, opening the doors to entrepreneurship, is now a prerequisite for sustainability-oriented growth and transformation," Salt said.

"For companies to survive, they need to make innovation sustainable. The common feature of all the leading companies in the world today is that they invest significantly in research and development (R&D) and innovation. Even countries diverge economically according to the strength of innovation. In other words, the rapid changes, entrepreneurship and innovation that occur together with technology have become the most important elements that increase productivity," he noted.

Salt highlighted entrepreneurship and innovation as the main sources of sustainable economic growth.

In parallel, companies are now attaching greater importance to in-house entrepreneurship. This motivates employees and offers them the opportunity to generate more value, create intellectual property, add value to the community they are part of, meet vital needs and create social benefits, Salt added.

"Until we reached the point of in-house entrepreneurship, as Zorlu Group, we went through certain stages, as many groups around the world growing with innovation did. We have implemented all the modern structures accepted in the world step by step. We have seen and continue to see a lot of benefits from this experience."

Among the ideas that attract the most attention is that of "Be Right Back," which is developing a platform that turns smart screens into gaming computers. "Geliverio" is working on an application that provides the most convenient cargo alternatives with dynamic pricing and fast delivery to businesses, while providing an easy shipping experience to cargo companies. "Whatever You Sow" is developing an agricultural platform that makes it easier for farmers to get harvest machinery and many technological services.

Addressing skill gap in tech industry

The need for human resources in mobile gaming, which generates millions of dollars in export revenue and has reached a billion-dollar size in Turkey, is constantly growing.

The "Kodluyoruz" program implemented through a partnership between Google and Patika.dev to address this growing need has enabled many software developers to join the industry.

It is working to make Turkey a worldwide talent hub by creating pathways for youth, especially women, seeking careers in the tech sector. Kodluyoruz addresses the skills gap problem in the tech sector and its boot camps and youth-led Alumni Club activities provide a pathway from unemployment to employment in high-value sectors for youth, especially women.

"We have determined the graduates of the program specifically according to the needs of the gaming sector," said Patika.dev Business Development Director Alev Orbay, addressing the event.

"Ninety percent of those who graduated the program have got a job. This is a fairly high rate. Moreover, those who find work have the opportunity to work in fairly good conditions," Orbay noted.

Also elaborating on the program, Google Turkey Marketing Manager Seçkin Tokgöz spoke about the export revenue generated by the mobile games in Turkey.

"We have rolled up our sleeves for human resource investment that will make this continuous. Mobile games developed in Turkey have quite high download figures in Android markets in the United States, the United Kingdom and other markets around the world. What’s more, these revenues are constantly growing. They provide significant foreign exchange inflow," Tokgöz said.

New holographic reflection approach

Emphasizing that they have been investing in deep technology startups for a long time, Inventram General Manager Cem Soysal said they look after and invest in long-term projects that are protected by patents.

"We offer important support for them to get on the road and become entrepreneurs. We bring them together with professional managers and provide a network, especially in the U.S. market. Our investment scale continues to increase every year," Soysal said.

Orkun Oğuz, CEO of CY Vision, which received an investment from Inventram, advised entrepreneurs who want to do business globally to be in Silicon Valley.

"The technology centers of the brands we cooperate with are located in Silicon Valley. We are talking about future plans here. Many investors in Turkey do not know how to work with entrepreneurs. They do not even prepare contracts accordingly," said Oğuz.

"We have developed a new holographic reflection approach. While providing a truly augmented reality experience with continuous depth to the next generation of tools, we are also reducing the requirements in terms of processor need and the space it occupies. With this technology, CY Vision has reached a position to provide augmented reality experiences in mobility and many other areas," he added.

Roadmap determined by data

Getir founding partner Tuncay Tütek stressed the journey of the on-demand rapid delivery pioneer in the last 51 weeks since it opened its first store warehouse in London, its first market outside Turkey.

Its rapid global expansion has seen Getir launching in the U.S. in November, debuting its services to the world’s largest retail market only a few months after expanding into Europe.

It launched in three U.S. cities in just over a month, including Chicago in mid-November and New York and Boston around mid-December.

The expansion in the U.S. followed its rollout in the U.K., Germany, the Netherlands, France, Italy, Spain and Portugal, all in 2021 alone.

"We were founded as a technology company on the first day. We are a retail-oriented technology company. Everywhere we go, we look at app download figures such as a heat map. The data determines our roadmap. Then we try to use the couriers’ time, which is the most important cost item, in the most efficient way to respond quickly to customer requests. We use technology at every point of this as well," said Tütek.

"We have become a multinational family of 30,000 people with technology operations in eight different countries."