Hacking an ecosystem: Leading angel investor network BUBA takes on ambitious projects with diversified portfolio

ELIF ERŞEN @elifbiniciersen
Published 01.01.2019 01:29
Updated 01.01.2019 08:00
Hacking an ecosystem: Leading angel investor network BUBA takes on ambitious projects with diversified portfolio

The university-based angel investor network BUBA Ventures is determined to continue to support entrepreneurs by capitalizing on the developing venture capital ecosystem in Turkey with a technology fund, an agriculture technology initiative, and a counseling business

Founded in March 2014 by Boğaziçi University alumni and currently running a $7-billion portfolio, BUBA Ventures is the only university-based angel investors' network accredited by the Treasury and Finance Ministry.

Since its inception, BUBA has expanded its network with several other initiatives including an agricultural technology startup, several funds, consulting firms, and patent evaluation firm in addition to finding angel investors for Turkey's leading startups.

"We are always striving to find the best startup with the best technology and team. We believe that these small startups create microeconomic structures. As they form a constellation of successful startups with many microeconomic units, they yield huge macroeconomic consequences," BUBA Ventures President Timuçin Bilgör told Daily Sabah in an exclusive interview.

During its inchoate period, the BUBA Ventures had formed successful acceleration programs with strategic partners, including leading telecommunication company Vodafone and a prominent Turkish private bank Garanti. These acceleration programs can be described as "101 to entrepreneurship," focusing on major issues, including but not limited to access to finance, marketing, product development, intellectual property rights, and pitching.

According to the BUBA report, incubation support was provided for 43 enterprises through acceleration programs and 16 of these initiatives received investments. More than 3,000 interventions were evaluated by 2018.

"In a very short period of time, we have started to welcome investment from big companies operating in Turkey," Bilgör said, adding that, "There is a general understanding that big companies or conglomerates do not own the 'muscles' to invest in startups, but we need to change this perception and include more big capital holders in the process of blossoming startups."

Today, with 70 accredited investors, BUBA is one of the angel investment networks with the largest investor portfolio in Turkey.

With a view to ensuring what Bilgör depicts as a "360 degrees" consulting, Buba Ventures established Boğaziçi Consulting for Business (BCB). Currently, it operates with 68 consultants sharing know-how and expertise with leading companies and startups.

In addition to a consulting business, in 2016, BUBA Ventures started an Istanbul-based capital investment fund in partnership with Istanbul Portföy A.Ş. Bosphorist Venture Capital (BVC). Bilgör said it is one of the notebook-definition venture capital that is capable of raising funds from third parties and operating with an independent investor committee as well as an advisory board.

Bosphorist's portfolio consists of startups born out of creative thinking.

"In addition to the fund we provide to our startups, we also provide continuous support for business development, finance, mergers and acquisitions (M&A) and other strategic management decisions," the BUBA Ventures president said.

"As BVC [Bosphorist Venture Capital] Team, we are interested in the vision and the product of this vision behind the business model and market situation. The common feature of our participating enterprises is that they all have founders with vision and appealing products," he added. The Bosphorist Fund made its first investment, Bilgör said, but gave no further detail.

"The announcement will be made in early 2019," he added.

In order to facilitate entrepreneurs' access to finance, the government made it obligatory for individual pension funds to invest in venture capitals. Last year, the individual pension funds, which receive a 30 percent contribution from the state, were required to invest 1 percent of their portfolios in venture capitals.

"The individual pension funds must increase savings and their fund allocation for venture capital funds. The increased amount of savings must be harnessed into new investments," Bilgör emphasized, drawing attention to the importance of directing savings funds into new investment opportunities.

Since 2012, the Turkish government has been striving to facilitate the access of startups to financial resources. Easing the regulatory frameworks for venture capital funds and angel investors, the government paved the way for the enhancement of the financial ecosystem.

In February 2013, regulation individual participation capital, or equity participation, took effect and the system for capital participation was launched. In June the same year, the first investment via equity participation was made, according to the Treasury and Finance Ministry.

The ministry's third-quarter report for this year shows that accreditation has been provided for 463 angel investors so far, while 18 of them received a license in the third quarter alone. Moreover, 424 angel investors without license operate in accredited angel investor networks.

TReeT: A treat for agriculture technologies

TReeT, a BUBA Ventures affiliate, is an investment company that works in agriculture and agriculture technologies. The project primarily aims to include agriculture technologies that will help improve conventional agriculture as well as improve agriculture as a whole.

"TreeT Agriculture and Agricultural Technologies will be a pioneering venture in the agricultural technology industry in Turkey. It will pave the way for agriculture ventures and the investments that will be made in these enterprises," BUBA Ventures President Bilgör said and emphasized that TreeT brings together the methods to maximize efficiency with cutting-edge technologies.

TreeT has a 400-decare area in Salihli district of Aegean province Manisa, which it uses for almond cultivation. Another 270-decare area in Köprübaşı district of Manisa is designed as an olive garden.

TreeT, part of the Boğaziçi University Innovative Agricultural and Food Management Platform (BOUN Agriculture), Doktar (Digital Transformation Platform in Agriculture), Intellectual Ventures (Agricultural Technologies Patent Commercialization Partner) and Cengiz Sülün (Conventional Agriculture Solution Partner), are all developing solutions that will boost productivity at low cost.

It brings the academic and business world together by organizing a number of free agriculture and technology panels. TreeT believes that digitalization is needed to increase agricultural productivity and develops solutions that can obtain greater yields at low cost. It then uses these solutions at TreeT gardens and shares the finding with all investors.

The world's largest patent funds Intellectual Ventures, represented by BUBA in Turkey, provide TreeT's agricultural technology patents. Cengiz Sülün, on the other hand, is TreeT's strategic business partner that undertakes the conventional agricultural production.

Bilgör stressed that as TreeT will enhance its portfolio, it will continue focusing on the agricultural products Turkey imports and they have already started with almond. According to the latest statistics, Turkey imports nearly 80 percent of the almond it consumes.

Speaking of TreeT's current ventures, Bilgör said the enterprise is in the process of investing in four different patents, two from Japan and two from the U.S.

He added that one of the patents is related to a technology providing boron for trees through the water to increase boron efficiency for trees. The second one is about the development of organic manure while the two others will be related to harvesting technologies.

"As much as cultivation, harvesting technologies is also of utmost importance in agriculture because farmers may sometimes refrain from collecting their products because of harvesting costs. We need to minimize the financial burden of harvesting with new technologies," Bilgör said.

2019 will be marked by numerous initiatives

BUBA Ventures president emphasized that they have big ambitions for 2019 and explained a couple of projects they are working on.

On a 40-decare land in Istanbul, BUBA Ventures is planning to establish the BUBA Park project that will provide thorough services for the world of entrepreneurship.

"Powerful brands and investors are really excited to partake in this project and we are looking forward to working with them," he said.

"Another technology fund in cooperation with The Turkish Scientific and Technological Research Council (TÜBİTAK) 1514 Venture Capital Support Program fund will be established in the first half of 2019," Bilgör added.

TÜBİTAK's 1514 Venture Capital Funding Program aims to provide grant support to Venture Capital Funds that have been established or will be established by the Fund Managers or Prospective Fund Managers of which it has accepted project applications.

This fund BUBA Ventures will establish with the support of TÜBİTAK 1514, Bilgör stressed, will focus on pharmaceutical and healthcare projects with a view to facilitate the development of new technologies and decrease huge dependency on imported products.

"We will exponentially continue our investments without getting caught in the talks of crisis," said Bilgör.

Buba Mansion: Turkey's first investor club

In December, BUBA Ventures inaugurated BUBA Mansion, a platform to gather investors in Turkey in order to enable them to find a common sense for future projects, accomplish investment plans that will contribute to the Turkish economy and create cooperation opportunities with global investors.

BUBA Mansion will share the best examples of global investors club with its participants. While accommodating three enterprises "unicorns" that received advanced-stage, the mansion will also attract art collection hunters with high-value works.

"BUBA Mansion offers entrepreneurs a highly qualified environment to present their ideas to investors and the investors will have the chance to closely interact with the projects in which they put capital. It is a mansion of opportunities where investors are able to make healthy investment decisions and meet with qualified entrepreneurs and experienced consultants," Bilgör concluded.

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