Global turbulence in the cryptocurrency market driven by bruising selloffs and volatility in the past year has plagued financial technology companies, often shortened as fintech.

The sting led to investments made in financial technology firms down to $75 billion, from $115 billion in 2021, so far this year, according to industry data.

In contrast, the high-flying Turkish fintech firms managed to lift the cash they raised to $89.1 million, from $67.7 million in 2021, even before the end of the year, the data by industry monitor startups.watch showed.

The amount in Türkiye shows the exposure to the volatility in the cryptocurrency market remained limited this year, also aided in part by the impact of regulations that have been implemented.

In addition, the fact that Türkiye has seen multiple billion-dollar worth startups, called unicorns, emerging over the last couple of years is said to have also ensured investors’ trust in the Turkish startup ecosystem.

Banks that had previously refrained from engaging with financial technology initiatives and refused to cooperate began to feel for the first time that the carpet under their feet was slipping with the introduction of multiple regulations.

It was difficult to see a single bank joining investment rounds of financial technology startups some five years ago, yet seeing prominent lenders such as Işbank and Fibabank next to a financial technology startup now shows how the transformation is affecting financial institutions.

Figopara initiative has managed to convince the two banks through its pledge to solve the financing problems of small and medium-sized enterprises (SMEs) through a single application.

Moreover, the top executives of the two banks have promised to support Figopara’s growth abroad with concrete steps, stressing what they expressed as sincere beliefs that the company would become a billion-dollar financial technology initiative.

Change in customer behaviors

In addition to the regulations, the change in customer behaviors is also said to have had a major impact on the major transformation.

One of the initiatives that gave encouragement to financial technology startups was the successful sale of the fintech iyzico.

The sale of iyzico to PayU for $165 million in 2019 turned out to be an important indicator for investors, while providing morale to financial technology ventures from Türkiye.

The deal followed a significant increase in the engagement of corporate and venture capital funds in financial technology startups. But there has not been a strong exit agreement yet.