Türkiye's startup ecosystem demonstrated robust growth in the first quarter of 2024, driven by record investments in seed-stage startups and significant contributions from government-backed funds.
While challenges persist, particularly in private investment activity and crowdfunding, the ecosystem's potential remains promising, buoyed by diverse sectors and strategic acquisitions.
The 158 investment deals in the seed stage from January through March positioned Türkiye as the second most invested in Europe in this stage, trailing behind the U.K., which closed 247 agreements, according to data by the industry monitor, startups.watch.
Overall, Turkish startups attracted $111 million across 161 rounds in seed, early and advanced stages, which saw a notable contribution from the Scientific and Technological Research Institution of Türkiye's (TÜBITAK) BiGG Fund, formerly a grant and now transformed into a pre-seed fund.
The state backing, notably through the BiGG Fund, played a pivotal role in the first-quarter results, with 107 out of 161 investments originating from this fund. It marked the highest first-quarter investment count ever made by a state institution.
Excluding government initiatives, the total investment count reduces to 54, marking the lowest private investment activity in the past 15 quarters. Despite this, Türkiye's position as the second most invested country in seed-stage investments in Europe underscores the growing significance of its startup ecosystem. The January-March period of 2024 became the quarter with the highest investment ever.
Türkiye rose to the top rank in the Middle East and North Africa (MENA) region in terms of the number of investments in the seed stage.
As for pre-seed investments, Türkiye emerged as the leader in both Europe and the MENA region with 112 deals, again influenced by the BiGG Fund.
Government support played a significant role in both pre-seed and seed-stage investments. Fifteen out of 161 investments involved either a company or corporate venture capital among the investors. Corporate venture capital participation in investments reached 28% in the first quarter, excluding BiGG Fund transactions.
The data also highlighted the growing influence of the gaming sector within Türkiye'sentrepreneurial landscape.
Gaming ventures secured $3.9 million with nine investment rounds, the startups.watch said. This placed Türkiye seventh in Europe in terms of deals' size and second in terms of the number of gaming investments.
In the MENA region, the country ranked second in terms of size and first in terms of the number of agreements. Particularly noteworthy is the country's strength in mobile gaming startups, signaling the emergence of new stars in the sector, albeit with increasing challenges in achieving previous valuations.
Additionally, the establishment of 350 venture capital investment funds, more than half of which were founded after 2022, contributed to 4% of the investments in the first quarter, the data showed. Fourteen of the funds are currently not active.
However, the impact of crowdfunding platforms seems limited. Despite the growth in crowdfunding platforms, only eight campaigns were successful out of 24 launched across 11 active platforms.
The data underscored BiGG Fund's impact on the entrepreneurial ecosystem, with investments primarily directed toward biotechnology, artificial intelligence and healthcare technologies. The fund's influence was evident in the overall increase in biotechnology investments.
Notable acquisitions during the first quarter include Re-Pie's acquisition of Modanisa, one of Türkiye's leading e-commerce companies, and Papara's acquisition of T-Bank.
The Private Enterprise Global Tech Innovator competition, which began accepting applications for the 2024 edition, is aiding technology ventures in accelerating their growth journey by showcasing their innovations and solutions on a global platform.
Participants benefit from the support, guidance and expertise of a broad network of business professionals during and after the competition.
The 2024 competition welcomes technology innovators from 23 countries/regions, including Australia, Brazil, China, Colombia, Estonia, Finland, Germany, Ghana, India, Ireland, Italy, Japan, Kenya, Mexico, the Netherlands, the Philippines, Portugal, Saudi Arabia, Sweden, Taiwan, Türkiye, the United Kingdom and the United States.
Participants will have the opportunity to showcase their innovative technologies and solutions in a global investment environment, which will propel their businesses to the forefront of the technology industry.
Özge İlhan, leader of Mergers and Acquisitions Advisory at KPMG Türkiye and company partner, said they are pleased to announce that Türkiye will be sending a finalist to this year's Global Tech Innovator competition.
"The winner of our national final will have the opportunity to present their startup in Lisbon in November, showcasing their venture to the world. Having the chance for entrepreneurs to establish themselves on a global stage and promote their businesses on an international scale will be a pivotal moment in their growth and success journey," said İlhan.
"We encourage all startups in our country to submit their applications to showcase Türkiye's entrepreneurial ecosystem to the world."
Applications submitted through KPMG's website will be evaluated by a jury composed of leading figures in the sector in Türkiye. The winning startup from the national finals will join the winners from 22 other countries at the grand global final, set to take place in Lisbon in November. There, they will have the opportunity to showcase their venture and innovation on the world stage.
Biletinial, which serves 60% of cinema halls in Türkiye, conducts 65% of sales in this field and accounts for 80% of total theater ticket sales, has launched another major project for cinema and theater enthusiasts.
The company introduced a user review and rating application developed with real user experience in cinema and theater, marking a pioneering initiative in Türkiye.
Biletinial, which brings together an average of 5 million tickets with audiences each month in categories such as cinema, theater, opera, concerts and sports, has initiated a review and rating system for all events sold on its website.
Ulaş Uslu, CEO of Biletinial, said one of their most important priorities is to ensure that users can access every service offered on their website effortlessly and quickly.
"We understand how crucial independent opinions about events are for culture and art enthusiasts in this fast-paced era. With this aim in mind, we have introduced a review and rating application on our website, setting a precedent in our industry," said Uslu.
"As part of our application, we send customers a personalized link via SMS after each event, requesting them to share their opinions with us. The received comments are published transparently on the website and on the partners panel. These comments provide other users with insights into the respective event," he noted.
Uslu explained the functioning of the application, stating: "After each event, customers are asked for their opinions through a personalized link sent via SMS. The received comments are published transparently on the website and on the partners panel. In a very short time, we have gathered more than 100,000 reviews from audiences who have genuinely attended the events."
Biletinial is the only company that collects reviews from verified viewers, he said.
"Visitors to the site can view both professional critic reviews and personal feelings and thoughts of viewers who have previously experienced the event they are interested in. This way, they can obtain firsthand and independent opinions about the film, play, stand-up show or concert."
Another notable feature of Biletinial's review application is the "young writer" "team formed with students studying theater criticism at universities at undergraduate and graduate levels. These young writers, who will become future professional theater critics, can watch plays and publish their reviews and analyses on Biletinial's website.
One of Türkiye's leading telecommunications and technology companies, Türk Telekom, continues implementing corporate social responsibility projects that harness technology for good and benefit even during the holiday season.
The "Accessible Theater" project, realized in collaboration with the State Theaters General Directorate Istanbul State Theater, continued in April with the children's play titled "The Snowman Who Wants to Meet the Sun."
Within the project, visually and hearing-impaired children and their families enjoyed an art experience that eliminates barriers through live description, backstage tours, and captioning applications.
Arif Sancaktaroğlu, corporate communications director of Türk Telekom, said within the "Accessible Theater" project, they "offer visually and hearing impaired art enthusiasts a unique art experience that overcomes visual, auditory and physical barriers."
"We eliminate barriers in art by turning technology into benefit. With the new play included in the project, "The Snowman Who Wants to Meet the Sun," we provided visually- and hearing-impaired children with an unparalleled art experience," said Sancaktaroğlu.
Continuing its corporate social responsibility activities with the understanding of "Value for Türkiye," Türk Telekom continues implementing projects that enhance accessibility at the Atatürk Cultural Center (AKM) by blending technology with culture and art.
It offers a theater experience that transcends barriers within the scope of the "Accessible Theater" project for visually- and hearing-impaired art enthusiasts.
Sancaktaroğlu said the company continues its corporate social responsibility projects with the principle of "accessible communication for everyone" and its "human-centered'' approach.
"By blending technology with culture and art at AKM, which we support as the main sponsor, we increase the inclusivity of this cultural complex, which is a valuable symbol of Istanbul, with accessible living projects with each passing day," he noted.
