Monday, September 6, 2010

Angel Investors and Venture Capitalists in Turkey

As an entrepreneur having gone through angel and venture capital (VC) funding stages for my technology start-ups, I have a special interest in developments of the VC world. I started hearing about increasing amount of investment activities mainly in the information technology (IT) field in my home country Turkey although small and medium enterprises (SME) in developed countries are still suffering from lack of business loans and slower funding activities that started with latest global finance crisis[1].

That stirred up some curiosity in me! I wondered how much of these investments were backed by VCs and angels. Traditional fund sources such as family, friends and bank loans have dominated in Turkish funding world while the U.S started venture funded firms in early 1950s and England in the 80s[2]. I wondered how about in Turkey? Do we have well-established VCs and angels? Who are they and based on which criteria do they invest? Which fields and what kind of companies do they invest in? What is their investment range and in which business cycle do they hop on board with a stash of money?!

That is why I conducted some research to write this article. I want to first clear out what I consider as a VC or an angel. Not all investors that invest in some kind of enterprise are a VC or an angel. So let’s start with some basic definitions and then I will jump to introductions of respectable Turkish angels and VCs.


VC is a general term used to describe a form of investor characterized by long-term, equity-based investment, frequently involving start-up and high-growth firms. The capital is typically used in the development of advanced technology products and services in fields such as information technology (IT), bio-technology, telecommunications and renewable energy. VCs are held to be hands-on investors, actively intervening in company management, and seek capital gain rather than income stream.

Well, for modern start-ups the problem with VCs is they are too big! VCs typically establish a pool of funds secured from various investors, have well-paid experts to manage the pool and make measured-risk, high-reward investments. Therefore, their diligence process is lengthy and once an entrepreneur is “good enough” to secure funds from them, they want to put in typically over $3M USD (a figure valid for the U.S. market)[3]. Please see the chart below for average VC investments made in the U.S. between 1995 and 2008.

As a result, a VC usually requires a serious commitment from the entrepreneur to pursue an idea that is highly experimental. If the product does not stick, it might make sense for the entrepreneur to pursue a totally different idea or drop the business altogether. This is much easier to do if you have raised $100,000 rather than $1,000,000. Therefore, entrepreneurs need someone to bridge the gap between building the initial product and building the company. This is where angel investors step in.

Angel investors are typically well-connected, wealthy individuals. They generally use their own money and do not come with the VC constraints described above. They usually understand the experimental nature of the idea and a seed-business. The following chart shows where business angels fall in the financing chain of an innovative company.



Let’s start with firms and groups that invest seed funds and then move to the ones that invest in later stage companies:

Inovent is a technology commercialization company. It specializes in development, commercialization and management of intellectual properties developed by universities, research institutions, technology companies and entrepreneurs in Turkey. They perform various services besides fund provision to entrepreneurs from business plan development to incubation services to intellectual property management. Their seed fund focuses on pre-seed, seed, proof of concept and initial commercialization stage deals and will typically make an investment of between 25,000TL and 250,000TL (1 TL is approx. 0.65 USD as of September, 2010)[4]. Inovent CEO Serhat Görgün expressed that they have helped found 16 startups including NanoTeco (nano technology), Maxima (machining operations), Inotek (web-based technologies), Selp (virtual webinar systems) and MetalForm (rapid resistance heating systems)[5].

Young Turk Ventures is an internet-focused investment firm led by Cem Sertoglu. The firm targets to invest between 100,000 and 4 million Euros. Although the company is agnostic in terms of target business cycle for fund-seeking companies, it is currently interested in deals over a million euro. The firm's investments include (via Mr. Sertoglu's involvement at iLab Ventures), (online food delivery) and Grupanya (merchandise deals site)[6].

Teknoloji Yatirim A.S. started investing in 2007. The firm provided funding to companies developing location-based services (Infotech) and a medical device pending FDA approval (Uca Medical)[7]. They target seed-level investment opportunities requiring less than 750,000 USD for companies operating in IT, biotechnology and health services.

Galata Business Angels (GBA) operates as a not-for-profit organization and acts as a platform where member angel investors and aspiring entrepreneurs discuss investment opportunities. GBA members founded companies such as AirTies (manufacturer of routers and gateways), Mynet (web portal), and (private shopping site)[8]. Membership to this premier investment group is by invitation only and members are expected to put their skins in the investment process at least once a year. Members usually invest in areas such as mobile technologies, Internet, software, and telecommunications where they have personal business expertise.

Lab-x provides full-fledged angel services from start-up incubation to funding provision by their 85-member angel network to innovation consulting services. They have investments in (interactive marketing site), Kobay (research animal lab) and SMS-Groups (mobile chat provider). Lab-x actively searches successful entrepreneurs via business plan competitions in collaboration with respectable universities (such as Bilkent) and business societies (such as GYIAD)[9].

iLab Ventures invests in Internet-based businesses or traditional businesses that plan to expand by using Internet technologies. For instance, the firm provided funding for in-house development of online businesses selling insurance products ( and personal retirement plans ( as well as platform sites matching freelancers with projects (Treda), and chemical raw material buyers with sellers (ChemOrbis). They also became a significant shareholder of several major Internet sites in Turkey such as (career finder) and (online bazaar). The firm director Yüksel Dibekoglu specified their target investment amount to be in the range of 0.5 to few million USD[4].

212 Venture Capital is a new and promising firm providing not only capital but also strategic support and guidance to early stage companies. It plans to work very closely with techno parks, universities, incubation centers and angel networks. The founders Numan Numan and Ali Karabey started this firm in 2010 after working in investment divisions of major finance companies such as Morgan Stanley, Goldman Sachs, and Deutsche Bank specializing in private equity and venture capital funding of technology firms. 212 Venture Capital is currently raising funds for Q1 2011[10].

Another VC that should probably be mentioned here is Big Bang Ventures as the firm, despite being located in Belgium, has made investments in Turkish start-ups[4]. Big Bang Ventures is a seed and early-stage venture capital fund for high-growth digital media and software companies. The firm typically invests from 0.5 to 3 million Euros. They invested in a performance based digital marketing company (DigiTouch) via Big Bang Ventures II fund and in a social gaming company (Peak Games) via Hummingbird Ventures fund. Please note that the firm has changed its name from Big Bang Ventures to Hummingbird Ventures, which is also the name of their third fund. The companies they invest are located in various European countries such as Pins (hosting services company in Netherlands), Shutl (on-demand immediate delivery network firm in England) and Clear2Pay (payment processing technology developer in Belgium)[11]. According to the firm director Frank Maene, Hummingbird Ventures has allocated a big chunk of its 50 million Euro fund to Turkey and is planning to announce their biggest to date investment in Turkey by the end of January, 2011.

KOBI Girisim is another investment organization that can be considered as a venture capitalist targeting established companies with high growth potential. They seem to differ from other VCs in Turkey due to high concentration of chamber of commerce rather than private company and group involvement in contributing for the organization's funds. So far KOBI Girisim has invested in companies operating mostly in manufacturing of machinery such as Makim, Intermak and BuTech, although they also intend to invest in telecommunications, biomedicine and information technology companies with high chances of dominating their future markets as a sole player. Their investment range is from 0.5 to 5 million USD[12].

Is Girisim Sermayesi, subsidiary of a major Turkish bank (Is Bankasi), has helped many high-growth companies in various sectors (tech or non-tech) since 2000. Their investments so far have been in the range of 1 to 12 million dollars per deal. Therefore, they consider mostly already established businesses operating with significant competitive advantages in their markets. Their company portfolio includes Havas (airport ground services), TurkMed Diyaliz (dialysis centers), and Probil (system integrator)[13].

Rhea Venture Capital Investment Trust (Rhea Girisim) is an Istanbul Stock Exchange registered public company, regulated by the Turkish Capital Markets Board (SPK). Its management team has some high-profile personnel of the government such as a former president of the Central Bank of Turkey, a former president of Istanbul Stock Exchange and a former senator. Rhea VCIT generally invests in companies of $2 – 20 million annual sales that have already completed their product and service developments, established a customer base, and have global aspirations. They do not invest in business models targeting Turkish markets only. They have control over invested company's finances and the board of directors (per their shareholding ratio). The primary sectors Rhea CIT invests are healthcare (medical devices, insurance and payment systems), information technology, software, hardware, Internet, energy/clean technology infrastructure, and business services (finance, hospitality and education). In 2010, Marmara Ferryboats (logistics), Envitec (waste disposal), Seta Medical (healthcare) and Netsafe (information security) were able to receive funding from Rhea VCIT in return for sharing 33% to 99% of their company's ownerships[14].

Esas Holding is a venture capital company owned and directed mainly by members of Sabanci family, which is one of the most well-known families in Turkish business world. The company has invested in 13 companies in 5 main sectors. Although they started their investment life with early-stage companies, over years their target shifted more to partnerships with and acquisition of large companies such as Pegasus Air, Trakya Farmers and AirBerlin. Therefore, frankly the company should not be the first resort for high-growth small businesses to secure funding[15].

FIBA Kapital Holding, Sedes Holding, Turkven Private Equity, Brightwell Holdings (Alphan Manas’ Private Investment Firm) and maybe few others that did not get picked up by my radar invest in later-stage companies and will be researched adequately and explained in another article.

Last but not the least, checking recently founded platforms like eTohum might help find those hidden investing and investment gems!

Special thanks to Ersan Cinan (@Intel Corporation), Volkan Gerdan (@VGG Verimlilik) and Ali Karabey (@212 Venture Capital) for sharing their knowledge with me on the matter.

Umit Dogan Demir

[1] Turkey: The new venture capital hot spot, Jennifer Schenker, Business Week
[2] The first venture capitalist: Financing development in Britain after 1945, the case of ICFC/3i, Richard Coopey, London School of Economics
[3] How angel investing is different than venture investing, Ben Horowitz,, 03/02/2010
[4] Inovent website:
[5] Webrazzi gundem – risk sermayesi ve melek yatirim, link:
[6] Young Turk Ventures portfolio companies:
[7] Teknoloji Yatirim portfolio companies:
[8] Galata Business Angels, About Us:
[9] Lab-x achievements:
[10] 212 Venture Capital website:
[11] Big Bang Ventures portfolio companies:
[12] Kobi investments:
[13] Is Girisim portfolio companies:
[14] Rhea Girisim portfolio companies:
[15] Esas Holding website:


  1. Thanks for the compilation.
    I may add a few more names: Teknoloji A.Ş. by TTGV, Golden Horn Ventures and Endovour Turkey.

  2. Also check out Grandstanding Traction:
    for history of firm deals and links to firms

  3. Thank you for providing such useful info..I am sure there must be lots of people out there not knowing what direction to take in terms of finding loans.

    I wish there were also angel investors for educational projects.

    Billur Cremer

  4. Cok guzel ve bilgi verici bir yazi olmus.

    Okan M. ERDEM

  5. Thank you for sharing such a valuable essay. I have learned a lot. Please do continue to share your visdom.


  6. Eda Efsun GökdumanDecember 20, 2010 at 3:20 PM

    I appreciate your taking the time to write this useful article. I enclose herewith a link for whom seeking an example with a slide show (TTGV),1,Slayt 1

  7. Eda Efsun GökdumanDecember 27, 2010 at 1:30 AM

    Ümit bey aşağıda linkleri paylaşıyorum:


    Global Girişimcilik Haftası etkinlikleri çerçevesinde Türkiye Odalar ve Borsalar Birliği tarafından düzenlenen ve Türkiye’de ekonominin büyümesi, zenginleşmesi için yegâne çözüm olan girişimciliğin nasıl hızla yaygınlaştırılacağı konularının ele alındığı panellerin video filmlerini TOBB TV’nin aşağıda belirtilen linklerinden izleyebilirsiniz.

    1- Türkiye’nin Genç ve Kadın Girişimcileri TOBB’da Kongrede Buluştu

    2- TOBB Girişimcilik Kongresi 1. Oturum "Türkiye' de Girişimcilik Nasıl Destekleniyor?"

    Moderatör: Nurullah ÖZTÜRK (STAR Gazetesi), Hüseyin TÜYSÜZ (KOSGEB Başkan Yardımcısı), Doç. Dr. M.Kemal BİÇERLİ (İŞKUR Genel Müdürü), Dr. Mete ÇAKMAKÇI (Türkiye Teknoloji Geliştirme Vakfı Genel Sekreteri)

    3- TOBB Girişimcilik Kongresi 2. Oturum "Türkiye' de Girişimcilik Nasıl Desteklenmeli?"

    Moderatör Prof. Dr. Güven SAK (TEPAV), Laird TREIBER (ABD Ekonomi Müşaviri), Prof. Dr. Arman KIRIM, Göktekin DİNÇERLER (Turkven Girişim Sermayesi Yönetici Ortağı), Ogeday KARAHAN (Eurasia Capital Partners), Özlem DENİZMEN (Doğuş Holding Strateji Grup Başkanı)

    4- TOBB Girişimcilik Kongresi 3. Oturum "Nasıl Başardılar? Zirveye Tırmanış Öyküleri"

    Moderatör Muharrem SARIKAYA (Habertürk), Işınsı KESTELLİ (İzmir Ticaret Borsası Yönetim Kurulu Başkanı), Özlem YEMİŞÇİ (Çorlu TSO Yönetim Kurulu Başkanı), Tayfun KARATAŞ (Fatsa TSO Yönetim Kurulu Başkanı), Gülden YILMAZ (Koton Mağazacılık), Alphan MANAS (Brightwell Holding)

    5- TOBB Girişimcilik Kongresi 4. Oturum. "İl KGK ve GGK' lar Tarafından Gerçekleştirilmiş Örnek Projeler"

    Moderatör Serpil YILMAZ (Milliyet Gazetesi) M.Rifat HİSARCIKLIOĞLU (TOBB Başkanı), Hatice MENDİ (TOBB Konya KGK Başkanı), Yıldız TUNA (TOBB Yalova KGK Başkanı), Adnan ÖZDEMİR (TOBB Batman GGK Başkanı), İbrahim Kürşat TUNA (TOBB Çanakkale GGK Başkanı).

    6- TOBB Girişimcilik Kongresi 5. Oturum "Kongre Sonuçlarının Değerlendirilmesi"

    Moderatör Prof. Dr. Serdar SAYAN (TEPAV Girişimcilik Enstitüsü), İlhan PARSEKER (TOBB Yönetim Kurulu Üyesi), Aynur BEKTAŞ (TOBB Kadın Girişimciler Kurulu Başkanı), Gülden YILMAZ (Koton Mağazacılık), Ali SABANCI (TOBB Genç Girişimciler Kurul Başkanı)

  8. Eda Hanim,
    These are great links! Thanks for sharing them with our blog readers.

  9. Per Hummingbird Ventures Director Frank Maene, I would like add the firm's website address here for those who want to find out more about the firm's investment strategy:

  10. Hi, great site,

    for investing in turkey, have a look at barclays expat site

    for useful resources


  11. I would like to add Omer Hiziroglu's input on the article. Mr. Hiziroglu is the director of technology transfer at Inovent.
    Here is his message:

    "Dear Umit,

    Thank you for this comprehnsive survey of the Turkish vc-angel ecosystem. I want to contribute with some (minor) clarifications regarding Inovent.

    Inovent has two funds. One is our seed fund that you mention in your article ("ISF"). The other fund is "Sakip Sabanci Fund" ("SSF"). Inovent does not operate SSF but has access to it. The main premise of SSD is that it makes funds available (typically at 5 to 50 K (TL) range) for ideas emerging soley from the Sabanci University.

    From ISF we have to date funded 3 companies: Nanotego and SELP that you mention in your article and one more recent one AMS. AMS is a company buiding mobilization devices for the handicapped based on propriety intellectual property (ie: patent).

    The other companies you mention in your article were funded by Inovent but not within the scope of our ISF, rather from our own op-ex budget. We typically budget some resources to enable us to make pre-seed or micro investments (such as fudning the incorporation stage and incubation of university based start ups)

    I also note that Golden Horn Ventures ("GHV") was missing on your list. As far as I know GHV is now fully invested. I dont know of any exits to date but I know they have been around for the past four years or so. There is also a misconception in the market that Inovent is related to GHV. Let me take this opportunity to clarify that we are not in any way related to GHV. We did encourage however the launch of GHV as we encourage the launch of any early stage VCs, a critical compenet in any tech based innovative ecosystem.

    Thanks for sharing"

  12. Just wanted to add this piece of info in the comments section here: There is a new startup accelator program initiated by Ozyegin University. Please check the Startup Factory (Girisim Fabrikasi) at

  13. The following comments got sent to me by Berna Tucel at IBM. It is an exciting program and funding opportunity for start-ups!


    Thanks a lot for this survey of the Turkish vc-angel ecosystem.

    I would like to share our new program called IBM Global Entrepreneur and SmartCamp Istanbul.

    This program is to support early stage Entrepreneurs to build a smarter planet.

    We’ve learned that our companies, our cities and our world are complex systems-indeed, systems of systems. Advancing these systems to be more instrumented, intelligent and interconnected requires a profound shift in management and governance toward far more collaborative approaches.

    IBM can’t do this alone, so we’re actively seeking partners to build out these new solutions. IBM created the Global Entrepreneur Program and hosted multiple “SmartCamp” entrepreneurial programs last year

    We are organizing SmartCamp Istanbul for the first time at Turkey.

    We encourage early stage Entrepreneurs to apply for SmartCamp Istanbul.

    Last day 30th August!