The global macroeconomic situation is recovering as vaccination rate accelerates. The rising trend of the entrepreneurial ecosystem in Turkey continues. In the second quarter of the year, 57 transactions and a record investment volume of $727 million were realized in the startup ecosystem.
KPMG Turkey announced the fourth of the Turkey Start-up Investments Report, prepared in collaboration with 212. The report, which includes quarterly reviews covering the second quarter of 2021, reveals the main trends, opportunities and challenges facing the venture capital market globally and in Turkey. Regarding the report, KPMG Turkey Mergers and Acquisitions Advisory Leader Gokhan Kacmaz said, “With the vaccination, the global macroeconomic situation started to stabilize and this created a positive atmosphere around the world. While uncertainties about the future decreased compared to previous periods, the global venture market surpassed the record investment volume in the first quarter of 2021, breaking a new record. Therefore, we can say that the second quarter of 2021 is a period of recovery and optimism.”
RECORD BROKEN
Regarding startup investments, Ali Karabey, co-founder of 212, said, “The total investment received by 57 startups in the second quarter of 2021 reached $727 million, breaking the all-time record. When we look at angel investment and venture capital investments per capita, in the second quarter of 2021, $8.8 per capita was invested in Turkey. This figure was at the level of $1 two years ago. The addition of five new $91 million funds established in 2021 indicates that investments will continue to accelerate. We anticipate that the success of start-ups in Turkey will increase exponentially in the coming period.”
UPWARD TREND
Ozge Ilhan, Senior Manager of KPMG Turkey Mergers and Acquisitions Consulting, stated that Turkey’s entrepreneurial ecosystem is following the upward trend in parallel with the world. “The volume of venture investments in Turkey increased by 43% compared to the first quarter of 2021, reaching a total transaction volume of $ 727 million with a total of 57 transactions, breaking a record on a quarterly basis.” Ozge Ilhan continued to interpret the report as follows: “In the second quarter of 2021, there were two mega transactions, which constitute 97% of the total investment volume and whose investment amount exceeded $100 million. The first of these is Getir, which is one step closer to becoming a ‘decacorn’ with an investment of $550 million and a valuation of $7.5 billion. The second was Dream Games, Turkey’s third unicorn, which received a $1 billion valuation and an investment of $155 million. Excluding the investment rounds completed by Getir and Dream Games, a total of 55 startups received investments of $22 million in the second quarter of 2021.”
A UNIQUE FIRST HALF PERFORMANCE
Turkey produced two different unicorns, Getir and Dream Games, in the first half of 2021. Considering that the total number of unicorns born in Turkey was three as of June 2021, the first half of 2021 was an exceptional period. Getir raised $550 million in its Series D round in June 2021 and nearly tripled its valuation to $7.5 billion, including new capital, just three months after the last funding round. While Sequoia Capital and Tiger Global, which took part in the last investment round, continued their investments in this round as well, Silver Lake, DisruptAD and Mubadala Investment Company became the new minority partners of Getir. After becoming a unicorn in the first quarter of 2021, Getir took a fast and big step towards becoming a decacorn in the second quarter, accelerating its international activities. Dream Games raised $150 million in Series B investment in June 2021 led by UK-based investment firm Makers Fund and US-based investment firm Index Ventures. While Dream Games is the third startup in Turkey to reach a valuation of $1 billion, it is the second startup after Peak Games, the unicorn in the field of gaming.
GLOBAL INVESTMENT NUMBERS ALSO INCREASED
- In addition to the record investment volume of $153 billion in the second quarter of 2021, global venture investments also broke a new record by reaching 136 in the number of new unicorns in the same period.
- Fast delivery and logistics, gaming, marketplace and fintech were the sectors that attracted the most investment by transaction volume, respectively. In terms of transaction count, the gaming industry led the way, as in the first quarter, followed by fintech, healthcare technologies and SaaS (software as a service).
- Turkey’s ventures in the gaming industry continued to grow and remained popular with investor interest. Three of the top 10 transactions in the second quarter were Dream Games, Uncosoft and Veloxia transactions in the gaming industry.
- In the second quarter of 2021, five of the top 10 transactions were made as acquisitions and the rest as investments. The two biggest featured acquisitions
- GarajSepeti was purchased by Mexican Kavak Intermediate Holdings for $25 million and the game company Uncosoft was acquired by Rollic Games for $20 million.
₺6 MILLION FOR AGRICULTURAL TECHNOLOGIES
Re Pie invested ₺6 million in HST Tarim, one of the new generation entrepreneurs, under the umbrella of the ‘First Mixed Technology Venture Capital Investment Fund’.
Investing in TECHNOLOGY and innovation-oriented business models, Re Pie has made an important investment in the field of agriculture and animal husbandry. Re Pie invested ₺6 million in HST Tarim, one of the new generation entrepreneurs, under the umbrella of the ‘First Mixed Technology Venture Capital Investment Fund’, which was established to invest in startups with high growth potential. With the investment support it provides, HST Tarim will expand its base of small-scale farmers and animal breeders and accelerate the necessary technology investments. HST Tarim supplies the fertilizer, seed, pesticide and animal feed needs of small-scale farmers and animal breeders at the most affordable prices and with ease of payment at harvest with its machine learning model. It also provides technology and data analysis-based consultancy.
PORTFOLIO GREW
Re-Pie Portfolio, Turkey’s first alternative investment fund management company to have an operating license, continues to grow with new investments in different fields. Increasing its total portfolio volume to ₺3.6 billion, the company continues to invest in technology and innovation-oriented business models. The company made an investment of ₺6 million in one of the new generation startups, HST Tarim, under the umbrella of the ‘First Mixed Technology Venture Capital Investment Fund’, which was established to invest in startups with high growth potential.
FROM SEED TO HARVEST
HST Tarim enables small-scale producers engaged in farming and animal husbandry activities to access all agricultural and livestock inputs such as seeds, feed and fertilizer at affordable prices at harvest, with animal or product sales payment alternatives. At the same time, it increases productivity through agricultural and animal consultancy, fertilizer and seed recommendations based on soil analysis, feed recommendations suitable for animal type and breed, satellite images, meteorological data and data analysis from precipitation radars.
TECHNOLOGY INVESTMENTS
With the investment support it provides, HST Tarim will expand its base of small-scale farmers and animal breeders and accelerate the necessary technology investments. Re-Pie Portfolio Management, which plans to invest in nearly 20 more startups in areas with growth potential such as fintech, gaming, internet of things (IoT), health and energy efficiency technologies, aims to play an important role in the development of the Turkish entrepreneurship ecosystem.
DIGITAL TRANSFORMATION STARTED IN REAL ESTATE
Within the scope of the project implemented with Turk Telekom and Hepsiemlak, the reporting provided by directing the mobile numbers assigned to real estate agents to their personal numbers increases the sales efficiency and business volume of the real estate offices that are members of Hepsiemlak. Within the scope of the cooperation, Turk Telekom’s ‘Mobile and Fixed Voice Integrated Call Management’ ensures that the calls made by the mobile numbers on the website of Hepsiemlak users are forwarded to the numbers belonging to the real estate agents. Thus, through the software located in Turk Telekom Data Center, opportunity tracking is provided in the real estate sector with detailed reports containing information such as the number of calls and duration of forwarded calls. Turk Telekom Strategic Customers Sales Director Ahmet Calik said, “With our mission to lead Turkey’s digital transformation, we continue to offer companies the most innovative technology solutions. In this context, we have implemented a platform that includes the integration of fixed and mobile networks, for the first time in Turkey, within the framework of our cooperation with Hepsiemlak. The detailed reporting provided by this platform reveals data that will increase sales efficiency and volume. We foresee that this project, which will provide great added value to the productivity of the real estate sector, will become widespread rapidly in the coming period.”
TRADING VOLUMES INCREASING
Zeynep Tandogan, General Manager of Hepsiemlak, said the following about the cooperation in question: “With our Smart Line product, we observe that our real estate offices increase their transaction volumes with a detailed reporting. In this way, missed call rates are almost zero. This means faster transactions and profits. As Hepsi Real Estate, we will continue our technology investments in the upcoming period with our vision based on speed, quality and trust.”
Source: Sabah / Translated by Irem Yildiz