Corporations are maintaining their engagement with the Turkish entrepreneurship ecosystem. Data showed that the corporations or their venture capital funds joined every one of three investments in startups during the first nine months of the year.
Events this week alone reiterated the high interest in technology ventures and startup acceleration programs by prominent corporations such as Işbank, Fibabank, Türk Telekom, SabancıDx and Yapı Kredi Bank.
Be it a bank or a holding, everyone seeks to define themselves as a technology company or to add a technology startup to their inventory to showcase that tech has become an important part of their business culture.
Türkiye has reached a stage where well-established companies are competing for investments in technology and financial technology initiatives. These companies are spearheaded by those engaged in payment technologies, cybersecurity, industry 4.0, Internet of Things (IoT), artificial intelligence (AI), Web 3.0, also known as Web3, and blockchain.
Venture capital funds add pace
Corporations can become minority shareholders when investing. They opt for a majority or becoming a 100% owner when it comes to businesses that they think could make up an important part of their institutions.
Figopara initiative, which is pledging to solve the financing problems of small and medium-sized enterprises (SMEs) through a single application, has attracted two prominent banks that are known for their high interest in the ecosystem.
Seeing the top executives of Işbank and Fibabank next to a financial technology startup shows how the transformation is affecting financial institutions. Besides, they are also making other investors partners in startup investments through the venture capital funds they have established.
Tech transformation gains momentum
Meanwhile, PILOT, the pioneering startup acceleration program run by Türk Telekom’s corporate venture capital company TT Ventures, has this year celebrated the graduates of its 10th term.
Türk Telekom is known for its efforts to help startups prepare for the global journey. The company is also becoming a minority shareholder through direct investments in the startups that graduate from the PILOT program.
SabancıDx, a subsidiary of Turkish conglomerate Sabancı Holding, is also trying to speed up technology transformation through direct investments in startups.
The digital technology company announced investments in three startups this week alone. It is stepping up its transformation journey with investments in cybersecurity, digital marketing and cloud technology.
Yapı Kredi, on the other hand, brought Web 3.0 initiatives to the stage within the scope of its acceleration program, stressing its eagerness to prepare for the innovation of the future.
Fintech ventures
The interest in startups engaged in financial technology has been following an upward trend in Türkiye, particularly over the last two years, in contrast to the global stage where investments have been losing momentum.
Some $111.2 billion in global fintech investments was recorded in the first half of 2021 through 3,372 transactions, figures that fell to $107.8 billion and 2,980, respectively, in the same period of this year, according to Figopara cofounder and CEO Koray Bahar.
The latest report by industry monitor Startups.watch showed fintech companies raised $88 million in 30 investment rounds as of October this year, Bahar noted.
"This figure was $68 million in 40 investment rounds in 2021. Given that report's publication date is October, the all-time record has been broken by surpassing last year’s figures two months before the end of 2022," he highlighted.
Mediating financing of 10,000 SMEs
The next-generation financial technology initiative Figopara, backed by Işbank and Fibabank CEOs, seems to have succeeded not only in accessing finance but also in receiving smart investments from all institutions included in the customer and potential growth map.
The Istanbul-based fintech venture in October announced it had raised $11 million at a valuation of $50 million in an investment round, joined by many prominent international businesses, venture capitalists and financial institutions.
The company’s backers included L2G Ventures, the Abdul Latif Jameel Investment Management Company, or JIMCO, World Bank Group member IFC, Eczacıbaşı Momentum, Fibabank’s Finberg, Maxis Venture Capital, an affiliate of Işbank, Logo Yazılım, Sabancı Ventures, ScaleX Ventures, Istanbul Portfolio TechOne Venture Capital Investment Fund and Development Investment Bank of Türkiye (TKYB) Venture Capital.
"The round led by L2G Ventures showed the trust in our company by the World Bank Group member IFC, Eczacıbaşı Momentum, Finberg, Işbank’s Maxis Venture Capital, JIMCO, Lima Ventures, Logo Yazılım, Sabancı Ventures, ScaleX Ventures, TechOne Venture Capital and TKYB Venture Capital under the roof of the Development Investment Bank of Türkiye," said Bahar.
"The fact that Türkiye's two major banks have joined our company as investors mark a brand new era in terms of bank-fintech cooperation. As Figopara, we want to become an institution that mediates the financing of over 10,000 SMEs per month."
Turning data into knowledge
Işbank General Manager Hakan Aran says startups that can turn data into knowledge will continue to grow, stressing what he said was the potential of Figopara of becoming a financial technology unicorn – a startup with a valuation of over $1 billion.
"The more businesses or individuals can access finance effortlessly and get the highest quality service at the most affordable price the more successful we will have done our task. The factors they provide in terms of digitalization and access to finance are the factors that explain why we are standing by Figopara today and supporting it," Aran noted.
For his part, Fibabank General Manager and member of the board Ömer Mert dubs Figopara, which they backed through Finberg, a "success story."
"While maintaining our fintech-oriented investment approach with Finberg, we plan investments primarily in retail technologies and artificial intelligence-based business models, besides high potential sectors such as Web3 and cybersecurity, in the upcoming period," Mert emphasized.
"We also aim to speed up expansions abroad of our initiatives through the foreign funds in which we are investors and to help them receive investments from foreign funds as well. Because Finberg is a brand that has created its own ecosystem and benefits startups at many points."
13 startups embarking on global journey
Meanwhile, one of Türkiye’s leading telecommunications and technology companies Türk Telekom is adding pace to its efforts to help further grow the country’s startup ecosystem, primarily through its corporate venture capital company TT Ventures.
The 13 teams that have successfully completed the 10th term of the acceleration program PILOT, run by TT Ventures, took to the stage this week at the Demo Day event to share their innovative projects and ideas that promise to create value and lead Türkiye to the future.
The 13 teams are engaged in developing solutions in an array of areas, from augmented reality, image processing, health care and blockchain to next-generation media and robotics.
Major financial support
"Our PILOT program, which continues under the roof of our group company TT Ventures, has become an important brand with the opportunities it offers and the investments its graduates receive. So far, the total cash support we have made to the initiatives within the scope of the PILOT has reached TL 30 million ($1.61 million)," Türk Telekom CEO Ümit Önal maintained.
In addition, by taking another important step this year, Önal said they have launched the "TT Ventures Venture Capital Investment Fund," which he says will make it possible for TT Ventures to reach more startups with flexible investment models.
"With this fund, we aim to invest in tech-oriented startups with high growth potential and to provide strategic and financial benefits to the fund’s investors," he noted.
Although this step is the first pillar of our investment strategy, we will reach a global level structure soon with our new studies in this field. As Türk Telekom, we will continue our investments that will carry the domestic startup ecosystem to a global level by working nonstop with our faith in our entrepreneurs and their ideas."
$20M investment
The 13 startups attending the PILOT program worked closely with nearly 250 mentors throughout the program’s 12 weeks, to access Türk Telekom’s business network and attract investment.
Teams that will be selected among the graduates will be granted the right to attend a program in the United States.
Approximately TL 30 million in cash support has been provided to 104 startups that have graduated from PILOT to date, while 45 of them had the opportunities to develop their projects and ideas after receiving investments from outside as well.
The PILOT graduates who are operating around the world, from Asia and Europe to North America and South America, have raised about $20 million in investments from abroad.
Transforming into global tech company
Operating in digital technologies, SabancıDx is increasing its presence in the global tech market with its investments in new-generation technologies and growth strategies.
SabancıDx has invested in cybersecurity, digital marketing and cloud technology companies, while it also has also moved its own data center completely to the cloud. It is trying to lead the transformation at the heart of a giant such as Sabancı Holding.
SabancıDx General Manager Doğuş Kuran conveyed the company’s renewed structure, investments and future goals at a press conference held at the SabancıDx Digital Campus.
Emphasizing that the company turned its direction to the new digital world and globalization in the last year, Kuran said that with the dizzying speed of technology, digitalization and the new economy, it has become imperative for companies to adapt to new technologies. Highlighting that SabancıDx offers digital and technological solutions to companies, Kuran said they have redefined their focus areas.
We have targeted global markets and shaped our investments accordingly. We have moved our headquarters to Europe and moved forward rapidly with a more integrated model in four verticals in order to offer global expertise to the companies opening up to these markets. Cybersecurity, digital marketing technologies and services, cloud and technology services and digital transformation products have become our four main focuses," he noted.
Kuran said that they increased the number of their customers by twofold and turned into a global technology company with offices in five countries and a "footprint" in 60 countries.
"Together with our competent teams who can speak 10 different native languages, we have increased our certified talents comprising different disciplines by five times. When we look at the areas of activity and the growth rate of our portfolio, we see no reason SabancıDx should not be a ‘unicorn.’"
Kuran further stated that SabancıDx will cooperate with hyper-scale cloud companies when they enter the Turkish market.
He said SabancıDx has investments in all areas of the cloud market and that they have business partnerships with the players of the industry globally.
"We will have a lot of new news at the beginning of 2023 with Bulutistan, which has received investment from Sabancı Ventures, our business partner with whom we work within the same campus," Kuran said.
Stating that they have served over 4,000 customers with the digital transformation products they have developed under the roof of StudioDx, Kuran said that they have transformed their end-to-end product development capabilities, ranging from ideation to commercialization, into a digital factory.
"We serve 10% of Fortune 500 companies with 10 products, including HrWe, Pratis and Edoksis. While transforming into a digital product factory, our goal is to create a customer portfolio on a global scale with these new generation digital products and to manage a strong ecosystem with strategic collaborations," Kuran added.
Blockchain tech-backed products, services
Meanwhile, a demo day event of an acceleration program co-partnered by the private lender Yapı Kredi was held this week on the sidelines of Innovation Week.
The event brought together investors and prominent names of the ecosystem with startups accepted to the Yapı Kredi Fast FRWRD program, which offers ventures engaged in developing blockchain technologies-backed products and services with training, mentoring, consulting and investor matching.
The "Fast FRWRD Blockchain Acceleration Program," the first edition of the Yapı Kredi FRWRD Acceleration Programs, realized in partnership with Avalanche and Yapı Kredi, ended with presentations by nine startups.
Yapı Kredi Deputy General Manager Yakup Doğan said that they aim to improve the innovation culture with Yapı Kredi Fast FRWRD and to offer faster and more innovative products with ecosystem partnerships and open innovation.
"As Yapı Kredi, we will continue our leading position in the coming period by supporting the innovation ecosystem and initiatives. Thanks to Yapı Kredi FRWRD, we are on an innovation-oriented journey together with FinTech ventures. We are constantly working to improve and differentiate our processes. For this reason, we will start our studies to make our next acceleration program focus on artificial intelligence. We are always ready to support startups that adopt technology, make initiatives in this field and have big dreams and success in their focus," said Doğan.
"Our primary goal is not only to be a bank that follows the technology world and benefits from it but also to be an institution that produces technology and especially directs financial technologies. We will continue to shape our structure, strategies and processes accordingly."