Successful startups encourage foreign investors

TIMUR SIRT
Published 11.08.2019 00:00
Successful startups encourage foreign investors

The State of Turkish Startup Ecosystem report, requested by the Presidency Investment Office from Startups.Watch for foreign investors, stresses that successful startup exits are encouraging others to invest in Turkey

The State of Turkish Startup Ecosystem report prepared by Startups.Watch, an expert on startup ecosystem research, states that successful startup exits are encouraging foreign investors. The report, which mostly includes evaluations of the managers of U.S.-based venture capital funds, notes that those who invest in the Turkish startup ecosystem gain from their investments.


Presidency Investment Office Chairman Arda Ermut.

The increasing number of venture acceleration programs is also reflected in successful startups. Investment Office Head Arda Ermut said out of 10 top-rated startup exits in Europe, three came out of Turkey last year. This successful startup exists, he added, encouraged foreign investors in the Turkish startup ecosystem. Startups.Watch founder Serkan Ünsal, on the other hand, said that the rise in corporate investment capital gained importance in this regard.

Startups accelerated in eight years

The report recorded that the number of venture acceleration programs rose from seven to 47 in the last eight years. A significant part of successful ventures can attract the attention of angel investors thanks to this acceleration program. Türk Telekom's Pilot and İş Bankası's Workup venture acceleration programs are among the long-standing institutions. While there was only one co-working area in 2010, this number increased to 41 in 2018. The co-working areas that enable ventures to grow rapidly are therefore continuing to increase. The support provided by the state institutions such as the Scientific and Technological Research Council of Turkey (TÜBİTAK) and Small and Medium Industry Development Organization (KOSGEB) to technology ventures has also revived larger projects.

Technoparks boost exports

Again, the number of technoparks hosting many early-stage startups rose from 39 to 81 in eight years. Moreover, the İTÜ Arı Teknokent acceleration program has created a significant measure with its international success. It was also noted that some of the startups that experienced successful exits received support from institutions such as İTÜ Arı Teknokent and ODTÜ Teknokent. Most importantly, the number of employees in these technoparks increased from 5,334 people to 51,574. Again in 2018, the total turnover increased by 23.1% compared to the previous year to TL 16 billion, while total exports surged by 31% to TL 3.8 billion compared to the previous year, encouraging new startups to emerge.

Top three exits from Turkey

Arda Ermut, president of the Investment Office, commented that the successful exits of the venture ecosystem in Turkey are encouraging for both entrepreneurs and investors. "To be able to talk about an ecosystem, the market, legal and physical infrastructure, human resources, and of course capital support are essential conditions, but in order for the system to enter a healthy cycle, successful ventures must first receive significant investments and then show the value they add to their investments through successful exits," Ermut said. "We are seeing very successful exits in the technology ecosystem of our country with increasing frequency in recent years. Although we did not take the first place in the investment volume statistics, three of the 10 most valued exits in Europe came from our country last year. Successful exits continue this year as well. We believe that these will both provide fresh resources to the system with the return of venture capital and inspire entrepreneurs and investors with new success stories."

Ermut stated that Turkey's location, young population and infrastructure opportunities offer unique opportunities not only for its entrepreneurs but also for regional entrepreneurs in rapid growth and technology development processes. "As the Investment Office, we support direct and indirect investments made by foreign investors in the technology ecosystem of our country, as well as the arrival of foreign technology ventures, which will add value to our sectors and make a difference." Ermut continued. "In this context, we believe that the Take-Off event to be held on Sept. 16-19 within the scope of Teknofest Istanbul, of which we are one of the main sponsors, is an important opportunity for both foreign technology investors and entrepreneurs to recognize the advantages offered by our country."

Institutions should engage more

Startups.Watch founder Serkan Ünsal said Turkey has great potential in terms of venture and investment in ventures, but after 2017 they went back a little because of the decrease in funds. "There are two ways to overcome this. First, more organizations need to step in and establish Corporate Venture Capital. Secondly, it is necessary to attract foreign funds," Ünsal noted. "To attract foreign funds, it is required to convey the developments in Turkey to the foreign press, investors, and businessmen regularly. This report was born out of this need. Investors who are curious about Turkey will invest more as they see the potential of startups in the country. Therefore, the more we promote Turkey abroad, the more benefits we will see."

Generation Y prefers starting own business

According to the results of the GoDaddy Global Entrepreneurship Survey, millennials, also known as Generation Y, in Turkey choose to be the boss of their own business instead of working in another company due to "flexibility." Technology is at the top of elements providing this flexibility.

GoDaddy revealed the results of the Global Entrepreneurship Survey, providing the tools and assistance needed for entrepreneurs around the world to succeed in the online world. According to the results, millennials in Turkey think that working for another company will not make them happy, and they prefer to face difficulties as the boss of their own business.

According to the results of the GoDaddy Global Entrepreneurship Survey, 25% of small business owners and entrepreneurs (all age groups) in Turkey say the best thing about being the boss of their business is flexibility. Some 26%, on the other hand, suggest that the best thing about being the boss of their own business was having "business owner" status. When the answers of different age groups are analyzed, it is seen that Generation Y is the group that gives the most importance to flexibility.

They don't like sitting in an office

GoDaddy Turkey and MENA (Middle East and North Africa) Regional Director Selina Bieber said the Y generation believes that being the boss of your own business in Turkey gives them more flexibility in business life. "Some 67% of the respondents stated that they might need to work harder while doing their own work, but they can do it in line with their own preferences. In parallel, survey results show that 42% of millennials work all day in their cars, from coffee shops or while traveling rather than sitting in an office," Bieber said. "Like GoDaddy's integrated product catalog, we believe that the technological tools available today provide the millennials in Turkey with the flexibility they need and help them grow their business according to their own preferences."

They want flexibility

According to the results of the GoDaddy Global Entrepreneurship Survey, 38% of the millennials in Turkey say that technological tools help them to better market, become visible and discoverable, and reach new customers. Another 25% of the respondents say that technological tools enable them to manage their business more efficiently and cost-effectively.

Using technology efficiently brings more global customers to Generation Y in Turkey compared to other age groups. Some 4% of respondents from all age groups say that the majority of their customers are global, while this rate stands at 8% for the millennials.

Digital talents fly to the best place

Decoding Digital Talent survey conducted in 180 countries reveals that young people with a new generation of professions prefer to live in a country with the most favorable conditions. Every country is competing to keep digital talents in their country.

Decoding Digital Code survey, one of the most comprehensive global researches on digital talents so far, was conducted by The Network with the participation of 27,000 digital experts from 180 countries. The research, conducted in collaboration with Kariyer.net in its Turkish leg, shows that two-thirds of digital experts are ready to move to another country to advance their careers. Digital experts working in the next generation of internet and technology companies want to demonstrate their skills in the best conditions. Turkey has to develop solutions to keep the digital skills that will become the most important tool of digital transformation in the country and prevent them from fleeing abroad.

The best education

The study is based on surveys conducted with 27,000 digital experts specializing in data mining, user experience (UX) and user interface (UI) design, programming and web development, mobile application development, machine learning, artificial intelligence, agile working methods, and robotics engineering from over 180 countries worldwide. According to the results of the research, 38% of digital talents have bachelor's degrees, 38% master's degrees, 4% doctorates. For those who do not have digital competence, the rate is 67%.

Big company dreams

The study reveals that the first choice of digital experts for their careers is not to work in startups, but to work in large companies. Contrary to popular belief, working in large companies is followed by opening their own business, working in small or medium-sized enterprises (SMEs), taking part in startups, and working freelance. A total 41% of digital experts in business life do not have any management responsibility positions, 29% work as lower-level managers, 21% as middle-level managers, and 9% as top-level managers or are the owners of their own business.

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