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The State of Turkish Startup Ecosystem 2021The State of Turkish Startup Ecosystem 20210310 // 2811 // 28STATE OF THEECOSYSTEMRise of New Funds!* As of June 30, 2021Chart 5 - Turkish VC Fundraising ActivityThe growth of the Turkish startup ecosystem and a series ofsuccessful exits have led to an increase in new venturefunds, while also making it easier for established VCs toraise their second funds. From 2018-2021, there is USD 680million in “dry powder” available for investment in Turkishstartups, the largest such available funding to date.A new regulatory framework for venture capital investmentfunds has now encouraged VCs to establish theirheadquarters in Turkey over the Netherlands orLuxembourg, as had been popular previously. Specifically,banks have shown a strong interest in establishing localbased venture funds.A few Turkey-based, early-stage VC funds and investment offices are as follows:Mega Rounds,Unicorns, Exits.Turkey entered anew era!List 2 - List of Early Stage Local Funds and Investment Firms in TurkeyiyzicoPayU,USD 165M, 100%List 1: List of Angel Networks in TurkeyInvestorsFrom a funding perspective, theTurkish Startup Ecosystem can bedivided into three periods. The first,prior to 2010, was the bootstrappingperiod, during which most startupsfound growth by relying on their ownresources and generated revenue.The second period, from 2010-2017,saw the emergence of new VCs, newangel networks, and new angelinvestors who became key players inthe ecosystem. Growth was focusedinwards, with internationalizationtaking a back seat. Also, while manymistakes were made, a lot ofexperience was also gained, and webore witness to several sub-billiondollar exits.Development Agency (ISTKA)provided matching funding to venturefunds, leading to an increase inlimited partners for funds.The third period has been highlightedby the rise of Turkish unicorns andseveral fast, successful exits whilelocal VCs, having raised their secondfunds, leveraged experience gainedthrough successful exits to beginmaking additional investments.Furthermore, funding and support forstartup investing also increased. TheMinistry of Treasury and Finance(MTF), the Scientific andTechnological Research Council ofTurkey (TÜBITAK), and the IstanbulLikewise, the government-sponsoredangel investment accreditationprogram, which began in 2013,provides tax advantages to activeangel investors, encouraging to theofficial accreditation of 643 angelinvestors to date.⁽⁴⁾Angel networks are also quite popularin Turkey. The most well-known angelinvestor networks, both accreditedand non-accredited, are providedabove.CloudpipesParaşütPeopliseQuick Base,-, 100%DST Teknoloji,-, 100%Logo,-, 100%DatarowSegmentifyAmazon,-, 100%Esor Inv.,-, 10%Funds Gaining MoreExperienceAmongst these early-stage VC funds, 212, 500 Istanbul,DCP, Collective Spark, Revo Capital and Earlybird DigitalEast Fund have successfully raised their second funds andare now applying experience gained from their first fundstoward new investments.ParaşütDST Teknoloji,-, 100%DolapEMBondsVivenseFITEUIPathTrendyol,-, 100%BGC partners,-, 100%Actera Group,-, 90.1%Triller,-, 100%IPO,-, -ForibaPeopliseParaşütSovos,-, 100%Logo,-, 100%DST Teknoloji,-, 100%List 3 - VC Funds & Their Exits

The State of Turkish Startup Ecosystem 2021The State of Turkish Startup Ecosystem 202112 // 2813 // 28Corporate EngagementIncrease in Thematic FundsThe acquisition of Peak by Zynga at a valuation of USD 1.8 billion, and Rollic’s 80% acquisition also by Zynga for USD 180million after only 21 months since founding have made gaming the darling of the investment community. In the past fewyears, WePlay Ventures and Ludus have raised thematic funds specifically to invest in local gaming startups.M&A ActivitiesIn just the past few years, Alibaba’s majority (82%)acquisition of Trendyol for USD 728 million in 2018, Zynga’sacquisition of Peak for USD 1.8 billion in 2020, and, in thesame year, after only 21 months since its founding, Rollic’s80% share acquisition for USD 180 million have proven theexit potential of the Turkish startup ecosystem.In terms of VC-backed exits, Earlybird Digital East Fund’sinvestment in UiPath was not only one of Turkey’s largestexits but for all of Europe as well. Other Turkish VC-backedexits, listed in order by size, include İyzico (212), Vivense(Earlybird DEF) and Foriba (Revo Capital).The five biggest acquisitions in Turkey between the years2010 to 2019 are as follows.List 4 - Top 5 Exits (2010-2021*) (USD)* As of June 30, 20210102030405PeakZynga, 1.8B, 100%Turkish corporations first started to engage with the localstartup ecosystem back in the early 2010’s. As theecosystem became more active, and more success storiesbegan to emerge, corporations increased their presence inthe ecosystem both through direct financial investmentsas well as corporate-sponsored accelerator programs. Withthe introduction of a regulatory framework for venturecapital investment funds, Turkish banks specifically beganto lead the charge in forming and deploying corporateventure capital (CVC) funds.CVC funds started in the last 10 years include:* As of June 30, 2021Chart 6 - Exits and Secondary Transactions in TurkeyDealsStartup investing in Turkey can be divided into threedistinct phases. In the first phase, from 2011-2017, newlyestablished VC funds made their first investments. By theend of 2017, most funds had finished their investmentcycle and began raising their second funds, leading to adrop in startup funding in 2018. In this second phase, from2018-2020, Turkish VCs, armed with newly raised funds,began investing in earnest again. Now, in 2021 andbeyond, the third phase, we are witnessing mega roundinvestments in high-flying scaleups with truly globalambitions such as Getir and Dream 0202021** As of Aug 15, 2021Timeline 2 - Timeline of CVCs founded in TurkeyExamining corporate and CVC participation in startup investing, 2020 saw asharp increase in the share of corporate investing, with 68 deals out of 186 totalfeaturing a corporate investor. In 2021, due to significantly larger ticket sizes,corporate participation has shattered previous investment highs with USD 517million already committed to date.IPO (Nasdaq), 761M, 20%TrendyolAlibaba, 728M, 82%YemeksepetiDelivery Hero, 589M, 100%Gram GamesZynga, 250M , 100%* As of June 30, 2021Chart 7 - Disclosed Equity Funding Rounds by Angels andVCs in TurkeyIn 2021, Getir raised over USD 978 million in funding acrossthree rounds while Dream Games raised USD 205 millionacross two rounds; just these two alone have pushedTurkey’s annual investment amount well over USD 1 billionfor the year.* As of June 30, 2021Chart 8 - Deals in Turkey by CVC Participation

The State of Turkish Startup Ecosystem 2021The State of Turkish Startup Ecosystem 202114 // 2815 // 28E-commerceTrendyol has become Turkey's first decacorn, havingraised USD 1.5 billion in its most recent fundraising roundthat valued the company at USD 16.5 billion, andHepsiburada’s USD 3.8 billion valuation in its NASDAQdebut, are the largest indicator of e-commerce’s successand continued growth potential. Specifically, thedevelopment of e-commerce platform models and sameday delivery logistics options have made the e-commercevertical one of the hottest sectors in Turkey.Hot VerticalsGamingThanks to Peak’s USD 1.8 billion exit and Rollic’s 80% shareacquisition for USD 180 million after only 21 months,Turkey has had an explosion in new gaming startups, with213 new gaming studios established between 2019 – Aug.2021. In total 445 gaming studios are currentlyheadquartered in Turkey, making it one of Europe’s mostimportant gaming hubs.Grocery DeliveryThe elevation of Getir, founded in 2015 on the principle of10-minute market delivery to your doorstep, to globalunicorn status and similar success/growth experienced byYemeksepeti in the fast market delivery sector under theBanabi brand has made the dark store concept a mainstayin Turkey cities. Additional players and startups continueto emerge in this sector, promising a variety of deliveryspeeds and unique concepts.Fintech* As of Aug 15, 2021Chart 9 - # Gaming startups founded in TurkeyIn the first 7 months of 2021, spurred by the success oflocally produced games in the global arena and anincreased appetite for gaming investments by VC funds,the gaming sector had 32 startups raise a total of USD 224million, breaking a local ecosystem record.Given the enormous support by local banks, regulativechanges made to support innovation in the sector, and thehigh number of successful exits, Fintech continues to beone of Turkey’s most important verticals. Recently,opportunities in open banking and cryptocurrency haveseen a surge in new startups pursuing new approaches.Billion Dollar ClubIn 2019, Turkey had yet to generate a single unicornstartup, or any technology company valued at over USD 1billion. Peak’s acquisition for USD 1.8 billion in 2020 madeit the first to pass this milestone. In the first eight monthsof 2021, new funding rounds by Dream Games and Getiradded two more to the list. Furthermore, Hepsiburadalaunched its IPO on Nasdaq at a valuation of USD 3.8billion, while Trendyol raised an additional USD 1.5 billion,becoming Turkey’s first decacorn. Thus, the Turkish BillionDollar Club went from a membership of 0 to 5 in just twoyears, with Trendyol being the sole decacorn club member.Established as recently as 2019, Dream Games becameTurkey’s fastest-to-unicorn startup in 2021. These successstories demonstrate that the Turkish startup ecosystemhas not only figured out the right ingredients to be a globalplayer, but how to do it at breakneck speed as well.Colendi raised USD 30 million in series A round lead by RePie Asset Management within the participation of foreigninvestors and it became the biggest fintech round.List 5 - Members of Turkish Billion Dollar ClubDeeptechChart 10 - # Game Deals in TurkeyDeeptech first began to emerge as an up-and-comingvertical in 2015. Since then, the establishment of twodeeptech-focused VC funds, the launch of deeptechspecific accelerator programs and incubation centers, andthe emergence of successful deeptech startups has madethis one of the hottest verticals to watch in Turkey.While not yet official, extrapolating current revenues andgrowth rates, the Turkish Billion Dollar Club is expected todouble the number of its members over the next twoyears.

The State of Turkish Startup Ecosystem 202104The State of Turkish Startup Ecosystem 202116 // 28WHY TURKEY ANDWHY NOW ?InterviewsListed in Alphabetical Order17 // 28Twenty years ago, in 2001 Pozitronturned one and Gitti Gidiyor andYemeksepeti launched. It was thedawn of the Turkish startup scene. Ecommerce defined everything, in aplace that lacked seasoned investors,let alone venture capitalists,incubators, and any hope to be aunicorn or simply “exit.”In two decades, Turkey’s startupecosystem has not just grown — it’ssurpassed expectations. Despitecrises and conflict, in two decades, ithas witnessed significant exits andhas yielded unicorns. Moreimportantly, it has evolved into avibrant and competitive network.Ali KarabeyFounder & Managing Partner at212borders. The benchmark is nowEurope, Asia, and Silicon Valley.Remaining on par with these globalplayers will be the test for the next 20years. That responsibility lies with theecosystem — the VCs, angels,accelerators, and other stakeholders.If the first two decades of the Turkishstartup ecosystem were hard, the nexttwo and beyond will be harder.Sustaining success always is.Today’s Turkish startups are players inAI, FinTech, Gaming, and SaaS — notjust in Turkey, but on the world stage.Our companies are globallyrecognized and fierce. The benchmarkis no longer confined to Turkey’sArın ÖzkulaGeneral Partner at 500 IstanbulWith a young and tech-savvypopulation with great engineeringtalent, Turkey always had greatpotential to be an important startuphub in Europe. Over the last 10 years,the Turkish startup ecosystem hasbeen gradually growing out of itsinfancy stage to fulfill this potential.Venture financing in this period grew10 times, and the growth hasespecially been accelerating since2018, with significant investments inTurkish founders and over USD 3.5billion of exit value. 3 of the top 10exits in 2018 and one of the top 10exits in 2019 in Europe were fromTurkey, while Peak’s exit to Zynga forUSD 1.8 billion was one of the largestexits globally in 2020.At 500 Istanbul, we are proud to bethe one of the first early-stageinvestors in Turkish founders. Havinginvested in leading companies likeInsider, Firefly, Carbon Health &BillionToOne, we believe that the lastfew years have hinted at Turkey’s truepotential in the next decade. We areexcited to continue to back globallyfocused teams with our 30m secondfund, and expect an even greatertransformation in the ecosystem inthe coming years.

The State of Turkish Startup Ecosystem 2021The State of Turkish Startup Ecosystem 202118 // 2819 // 28Atıl ErkenGeneral Partner at CollectiveSparkas Tarfin, Justmop, Yolda went on toraise follow on funding fromreputable US & EU based investorswhere our deep reserve policyallowed us to lead or participate inmultiple rounds. We continued ourpace during COVID-19 and we are notslowing down anytime soon.Collective Spark is a USD 40 millionearly-stage technology fund primarilyfocusing on ventures coming out ofTurkey & Turkish diaspora in areassuch as fintech, marketplaces,gaming, SaaS and enterprisesoftware. From our second fund, wemade twelve investments in threeyears, having led eleven of the initialrounds. Startups in our portfolio suchAs the founding partners of BoğaziçiVentures, we were fortunate to be theearly entrepreneurs in gaming andfintech verticals with multiple exits.Now, we enjoy being one of thepioneers in the eco-system as theearly stage tech investors.Turkish tech companies are extremelypowerful in terms of hard workertalents, creativity, and ambition. Themarket provides the ideal conditionsto launch and polish the techproducts. Open minded teams areclose both to Western and Easternculture and business networks whichexpands the addressable market.This is a geography where techentrepreneurs truly work fordisruption.Local market is big but in the last 5years we see a strong mind shift tointernational growth. That created asignificant fuel for acceleration. It’snow more likely to see techTurkey once again has proven to be avery capital efficient marketproducing significant exits and manyunicorns despite being significantlyunder penetrated with respect to VCdollars. This gap might start closingas we continue to witness USD 1B private equity funds cutting singlemillion-dollar checks in pre-revenuestartups. We are also confidentgovernment is going to continuedoing its share by directly investing infunds & fund of funds, givingconfidence to other types of patientcapital such as local endowmentswhich we are proud to have securedas backers.We continue to be bullish on theentrepreneurial and engineeringtalent and the determination of serialentrepreneurs shooting for biggeroutcomes. We strive to be the mostentrepreneur friendly fund by closelyaligning incentives and by being atthe service of our entrepreneurs 24/7,through strategic & practical advice,global connections and operationalresources in different areas ofexpertise. As the most co-investmentfriendly fund in our ecosystem, wehave seen inspiring results by joiningforces with local & global VCs andvalue adding angels.We set out as Yolda.com in 2020 withthe aim of being the leading FreightTech startup not only in Turkey butalso in Europe. Yolda.com matchesfreight shipments with availableindependent carriers to provide fast,cost-effective transport for businessesof all sizes. We specialize in ‘less thantruck load’ (LTL) shipments,harnessing ‘sharing economy’dynamics. This means we consolidateloads from multiple shippers, makingthe most of each truck’s capacity. Thishelps reduce logistics costs, increasescustomer satisfaction, and helpsreduce the carbon footprint of theend-to-end freight journey. Moreover,our business model supportsindividual carriers by opening newbusiness opportunities for themthrough the Yolda.com web platform.Turkey was a good place for us tobegin operations. Our home countryhas almost 1 million independenttruck drivers, and road is theC. Murad ÖzsertCo-Founder & CTO at yolda.comdominant form of inland freightmovement, market size reaching upto 50 bn USD - big enough to provideus with the necessary market depthon our journey to becoming Unicorn.Another advantage of startingoperations in our home country,Turkey; was the demographicadvantage of our country and a welltrained engineering talent poolincluding software developersavailable to build a sustainable andscalable business. And this was adirect result of strong universityinfrastructure focusing onengineering and technology. Thelogistics industry is just at thebeginning of digitalization for bothTurkey and Europe. It is still aconventional sector handled in sameway upon hundreds of years. Now, itBarış ÖzistekCem SertoğluGeneral Partner at BogaziciVenturesManaging Partner at EarlybirdDigital East Fundcompanies with exponential growth.Recent unicorns prove the stronggrowth while we expect the market toreach more than 10 unicorns soon ingaming, RetailTech and Fintechverticals.There is a strong wind at Turkish techeco-system’s back. Top talents arewilling to work for startups instead ofconglomerates, experienced talentsare brave and ambitious to becomeentrepreneurs, early stage financing isreachable and many governmentsupports push for more internationalgrowth. We’re in the correct time andlocation to develop the next unicorns.At Earlybird Digital East, Turkeycontinues to be one of the coremarkets for our 200m early-stagetech VC fund dedicated to EmergingEurope.Turkey’s large domestic economy andstrong technical talent base make it abreeding ground for ambitious techstartups addressing large global orregional markets. We were fortunateto have backed the largest technologysuccess stories emerging from thecountry, including multibillion-dollarcompanies Trendyol, Peak, andYemeksepeti, each proving thepotential of the Turkish startupecosystem.is our turn. We are expandingour operations and services to Europeaiming to make Yolda.com as globalstartup. We believe that our hyperscaled growth ambition and earlystage investments received fromprominent global investors willencourage Turkey's entrepreneurs tobuild success stories in increasingnumbers aiming at scalable businessmodels and developing truly globalproducts.Supported by easier access to capital,Turkey’s brilliant engineering talent isgetting more ambitious in developingproducts that address global markets.Peak's huge success in the US andother major markets is a testament tothis.Turkey’s large and tech-savvypopulation also enables consumerfacing businesses to create very largeoutcomes, even if these businessesstay local. Trendyol is a great exampleof this, becoming a multi-billiondollar success by focusing on theTurkish e-commerce opportunityalone.Turkey’s strong fundamentals andinvestment track record make it agreat market for early-stage techinvestments. We are very enthusiasticabout the opportunity our homemarket presents and continue to seeit as our most attractive investmentgeography.

The State of Turkish Startup Ecosystem 2021The State of Turkish Startup Ecosystem 202120 // 2821 // 28Cenk BayrakdarManaging Director at Revo CapitalWe are excited for the continuedstrong growth of the Turkish startupecosystem in 2021. USD 509 millioninvested in a total of 62 deals which ismore than the total of any other year,marking a record high year for Turkishstartup ecosystem. Our portfoliocompany Getir attracted USD 428M ofthe total USD 509M investment for itsglobal expansion, becoming thehighlight of Turkish ecosystemin 2021.companies. However at later stages,we are observing an increasingfunding gap and unrealized potentialsof internationalization. It is thereforecrucial for Turkish VCs to leverage andshare their fundraising know-how andmake introductions to internationalVCs as follow-on investors. Over thepast year we also observed theTurkish startup ecosystem becomingincreasingly decentralized as startupsand IT developers have becomemobile as IP no longer hasboundaries. As a result, we are alsoseeing an uptick in the number ofTurkish founders that start theircompany abroad.There is more than USD 500 milliondry powder in the ecosystem stillwaiting to be deployed over the nextcouple of years, presenting a greatopportunity for early stageWe plan on closing the gap in growthfunding through Revo Capital Fund II.We completed the third closing of oursecond fund at 60M and havealready backed 5 companies. We planDemet MutluTrendyol Founder and CEOtraditional values—such asgenerosity, loyalt

TURKISH STARTUP ECOSYSTEM New Member of Unicorn Club! Credits & Contact StartupsWatch Istanbul,Türkiye . USD165M,100% Cloudpipes QuickBase,-,100% Foriba Sovos,-,100% Dolap Trendyol,-,100% Datarow Amazon,-,100% Paraşüt . Billion Dollar