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Preface 3

Introduction 5

Geographical Dimension 7

Individual Dimension 14

Institutional dimension – General Overview 19

Access to Finance 21

Startups 26

Human Capital 32

Business support structures 33

Conclusion 38

Bibliography 39

Appendixes 40

List of figures 45

For centuries, Istanbul has been a centre of attraction for Turks and foreigners alike. From the glo-
rious past of the Ottoman Empire to the often troublesome times of the Republic, Istanbul has
been dubbed as the crossroads between Europe and Asia. As we descended in the bus to the
historic Taksim square, we inadvertently became immersed in the many-faces of Istanbul. The
face that interested us had adolescent features and a teenager’s altitude, but the glowing vigour
of its ambitions could not be ignored. Only a handful of cities in the world can enjoy the eco-
nomic, geographical and urban predispositions to be a global startup hub. Istanbul, has enor-
mous potential for advancing towards this status. The entrepreneurial face of Istanbul could have
transformative economic and social effects on Turkey and the region. As our report concludes,
Istanbul’s startup sector is on the right track, but it still needs a firm push in the right direction. .

This report examines the entrepreneurial ecosystem of Istanbul by dividing it into key structural
components: geographical, individual and institutional. In addition to descriptive conclusions,
each section also has recommendations for different stakeholders. In terms of methodology, we
gathered qualitative data through interviews and correspondence with industry-professionals on
a sample size of 50, and including 10 in-depth interviews. Questionnaires were personalized re-
flecting the diversity of interviewees, though general features are included in the appendixes sec-
tion. Interviewees were often directly related to entrepreneurship: founders of enterprises, serial
investors or founders of incubators/accelerators. For a more general asessment we interviewed
university professors, IMF officials and even diplomats.. Quantitative data was gathered through
private-equity and venture capital databases as well as news portals such as TechCrunch, We-
brazzi and others. The list of sources is included in the bibliography.

This research was conducted in cooperation with Sciences Po BABEL Initative and was funded
by Sciences Po Paris and numerous Turkish sponsors. We would like to take this opportunity to
thank all those individuals who were central to this research. We would like to thank BABEL Initia-
tive for getting us to Istanbul and letting us meet all the great people we met. Professors Jana
Jabbour and Lamiss Azab – for their most caring supervisory work, invaluable advice, excep-
tional patience and belief in our project. We would also like to thank the people we met in Istan-
bul and with whom we were in close correspondence – your expertise and disruptive spirit are an
inspiration to us: Memduh Karakullukcu (Global Investors Forum), Prof. Dr. Erhan Erkut (MEF Uni-
versity), Ilker Cetin (IFC), Fit Startup Factory, Sinan Ulgen, Deniz Beyrakdard (Kadir Has Univer-
sity), Sean Yu (Parasut) and Ali Karabey (212 Ltd.). Our gratitude also goes to all the entrepre-
neurs, investors, directors and representatives who we contacted , your invaluable advice was
central to our research and findings. We now invite readers to plunge into the exciting and up-
and-coming tech sector of Istanbul.

Menton, France,

June, 2015

The Past decade has seen significant economic of employment, innovation and income equality,
growth in Turkey - factor that accelerated, or in addition to creating high value-added pro-
even precipitated, the emergence of Istanbul as duce and diversifying the economic base. De-
a global startup hub. Prior to the 2000s, technol- velopment of financial institutions and other in-
ogy startup sector hardly existed in Turkey and termediaries could enable entrepreneurs to inno-
in other developing economies. However com- vate and advance their economies, while smart
bining expeditious technological developments and shrewd regulation could obstruct unneces-
together with emerging markets’ humongous sary limits to fluid entrepreneurial acumen. It is
economic potential, entrepreneurial ecosystems highly perplexing to explain how broad mac-
became as much of a reality in Shanghai, Mos- roeconomic conditions have anticipated the de-
cow and Bangalore, as in Silicon Valley or Lon- velopment of entrepreneurial ecosystem – as
don. The emerging markets jumped onto the the ecosystem becomes the driver for eco-
bandwagon and it has become apparent that nomic development as much as its result. How-
entrepreneurship can effectively address issues ever it is important to discuss Turkey’s swift mac-

roeconomic developments: in less than a dec- tanbul’s economic dominance vis-à-vis other re-
ade, Turkey has managed to uphold consider- gions in Turkey. Urbanisation alone simply can-
able economic gains. Turkish exports have more not explain the proliferation of startups in Istan-
than doubled, with Germany, Italy and the UK re- bul and as we explain in the following sections,
maining the largest importers of Turkish goods. this geographical dimension has considerably
In addition, Turkey’s GDP per capita has in- more explanatory variables. Most analysts agree,
creased from $4,000 a decade ago to $11,000 in that this economic spur was a result of reaping
2013 – a remarkably prompt development even efficiency gains due to a low starting base. Presi-
for an emerging market economy. Equitable distri- dent of Global Relations Forum, a leading foreign
bution of these gains remains to be questioned; policy association based in Istanbul, Memduh
yet it is evident that these economic develop- Karakullukcu; has projected that “Turkey can still
ments have empowered millions of middle-class attain at least 5 to 10-year robust growth based
Turks. According to the World Bank Enterprise mainly on reaping still unexploited efficiency
Survey, Turkish annual labour productivity growth gains”. To continue growing further, growth will
in 2014 reached 7,5%, far above the global aver- have to originate from rather more sophisticated
age of 1,3% or 2,7% of Eastern Europe and Cen- sources.

tral Asia. All of this
Urbanisation has also
growth has been at-

contributed to the swift
tained without redun-
economic development
dant public borrowing.
The Turkish government 10-YEAR GROWTH with cities other than Is-

tanbul emerging as re-
has been gradually re-
gional business centres.
ducing its public debt-
to-GDP ratio from 77,9% UNEXPLOITED Diffusion of knowledge

also resulted in growing
in 2001 to 42,4% in
productivity and transfer
2010. Stringent public
of know-how across a variety of sectors. From
finances have facilitated private sector-driven
the entrepreneurs we had the opportunity to
economic growth. The last decade has also wit-
meet, only a handful was educated in Turkey, indi-
nessed the continuing rise of “Anatolian Tigers”
cating that the émigrés, educated in elite West-
– a new breed of entrepreneurs originating from
ern universities, are flooding back to Istanbul real-
the cities in the plateau of Anatolia, rather than
ising Turkey’s enormous economic potential.
the historical centres of commerce, such as Istan-
Though at the moment senior management posi-
bul. The emergence of the “Anatolian Tigers” indi-
tions in the startup ecosystem are assumed by
cated that economic gains are being allocated
those educated outside Turkey, our report fore-
more equitably across the geographical spec-
casts a turnaround in these dynamics. Rest as-
sured, if Turkey manages to avert the “middle in-
However Istanbul still generates about 22% of come trap” and restructure its public sector, a
Turkey’s $822,1 billion GDP. Hence one of the fac- bright future lies ahead.
tors attributing emergence of a startup hub is Is-

You may ask, what exactly distinguishes Silicon Valley from Istanbul or any other startup hub in the
world? Many factors may set certain cities apart from each other, but their geographical position is
crucial. Silicon Valley is trapped between mountains in the south and San Francisco Bay in the north.
While the actual geographical area ranges from the southern outskirts of San Francisco in the North
West to the city San Jose in the South East, most entrepreneurial activity takes place between State
Route number 84 next to Palo Alto and number 85 next to Menlo Park. Together with the mountains
and the sea, these streets are the frontiers of what is usually referred to as Silicon Valley. In reality the
entrepreneurial part of the valley is thus concentrated inside a tiny area of about forty-five square
miles. Nearly all of the twenty thousand local startups and investors are concentrated in this area with
Stanford University right at its heart. Geo-social density benefits an entrepreneurial ecosystem by in-
creasing the probability of the “right” fit. It works like blind dating or the hunt for a partner in a
crowded nightclub.

In a nightclub there is a given number of people p who are divided into
 the groups f and e such that f+e=p. Let’s assume that f and e are the

MATTERS numbers of men and women in the club, respectively, and p is limited
through the size of the venue. Meanwhile the probability of finding a
given individual of the opposite sex attractive is given by the universal
and exogenous constant c with 0<c<1. In order for two individuals of
the opposite sex to match, both have to find each other attractive; this
corresponds to a probability of c2<c. Implicitly this possibility of rejec-
tion will to a rational action such that members of group f will prefer
clubs with a higher e/f ratio whereas members of e will have opposite
preferences. Overwhelming presence of a predetermined target group
will thus increase the probability of a match. Different entrepreneurial
ecosystems usually work under the same premise; with many entrepre-
neurs, investors and other entities relevant to entrepreneurship live on
the same spot and constitute a large part of population in a certain
area, potential matches will be higher. It is more likely to meet someone
like-minded at a house party who could potentially become your next
co-founder, the guy in front of you at Starbucks could be interested in
investing, so why not pitch your idea and your friend tells you about a
friend of a friend of his who has this unique idea? Go talk to him, he
lives right next door, you might become partners. The idea of density is
a very simple one, which is being a catalyzer for serendipity. This
worked perfectly well in Silicon Valley, but how about Istanbul? In Istan-
bul there are fewer entrepreneurs spread over a larger geographical
area. The city’s central urban zone which houses almost all of its entre-
preneurial activities measures about one-hundred-fifty-seven square
miles, roughly four times the size of comparable zones in Silicon Valley.

Moreover, the few existing entrepreneurs are spread all over the city. In
fact, they are spread over two continents which does not only impose a
CONDUCIVE TO geographical boundary through the Bosporus, but also an ideological
COMMUNICATION one. People in Kadiköy think of the Europeans as stiff whereas for some
Asian-side inhabitants, Europe-dwellers seem too lavish in their atti-
tude. This split is not conducive to communication and does not only
affect soccer rivalries but also economics. Indeed small groups East
and West of the strait tend to remain among themselves, thus ideas
tend not to cross from European part of Istanbul to the Asian side and
vice-versa unless they grow sufficiently big to spark trans-sectorial at-
tention. Moreover entrepreneurial activity seems to have shifted to-
wards the European side of the city; Important startups (cf. parachute,
Bera Group, Arcade Monkey, Yemeksepeti, Markafoni, Gittigidiyor), big

investors (cf. 212 Ltd., Galata Business Angels, Early Bird Venture Capi-
tal) as well as entrepreneurial support and education (cf. Fit StartUp
HAS LESS DEVELOPED Factory, Startup Bootcamp, Koç University Accelerator) can be found
ENTREPRENEURIAL West of the Bosphorous, while the Asian side of Istanbul has a less de-
STRUCTURES veloped structure of this kind. Aslanoba Capital is the biggest venture
capital firm on Istanbul’s Asian side. So far, Hasan Aslanoba, who
founded and runs the fund, has made investments into over thirty start-
ups since mid-2013. The company predominantly invests in e-
commerce ventures, but also other web-based startups can be found
in its portfolio. So far the most successful ones among them are Bi-
Taksi, HotelRunner and eTohum. More interestingly, Aslanoba started
his investments on Istanbul’s Asian side ( cf. BiTaksi) and only later
gave venture funding to European startups. At the moment his com-
pany holds a well-diversified portfolio with success stories from both
sides, European and Asian.

However Istanbul has found ways to overcome its disadvantages in
OVERCOMING spatial predisposition as well as entrepreneurial quantity by discarding

 hopes on informal matches within the entrepreneurial ecosystem and
coordinate planned gatherings as the central hubs of exchange in-
DIVIDES stead. Five events in particular serve as formal gathering opportunities
for entrepreneurs in and around Istanbul. The two largest conventions
are Startup Turkey and Startup Istanbul, international events that bring
together young companies, experienced professionals, investors and
accelerators. They are the equivalent of a formalized version of entre-
preneurial speed dating. Both annual events gather investors from all
over the world, including American gems like Y-Combinator or 500Start-
LACK OF DENSITY IS ups. Meanwhile the magnitudes of both events are in hundreds;
COORDINATE PLANNED Startup Turkey had over 700 attendants in 2015, with one hundred start-
GATHERINGS ups and 150 investors participating in the event held in Antalya. Over
the course of three days, founders pitch their ideas and investors se-
lect the best of them. It is a version of efficient networking and fundrais-
ing with the entirety of Turkish entrepreneurial ecosystem concentrated
in one spot. Here, once more, density matters. The conference has
been facing a steadily increasing number of participants throughout
the last seven years and its organizer, Etohum-founder and CEO Burak
Büyükdemir aims to grow his event even further in the upcoming years.
Meanwhile Startup Istanbul is a fairly smaller version yet still one of the
major events around the Eurasian border that brings together members
of the entrepreneurial ecosystem and concentrates on developing the

culture of entrepreneurship. There also exist less formal structures to
compensate for the little density of entrepreneurs in Istanbul and sur-
rounding areas. Google has taken its initiative Startup GRIND to Istan-
AND FOUNDATIONS ARE bul and is hosting periodical events there, the Ewing Kauffman founda-
HOSTING EVENTS tion is focused on hosting an annual entrepreneurship week in Istanbul
GLOBAL KNOW-HOW in November, an event that aims at networking and connecting startups
with global know-how. The least institutionalized form of entrepreneurial
gathering before a coffeeshop queue can be found in local workshops
organized online and covering very specific sectors, discussed by lo-
cal professionals in order to help aspiring entrepreneurs to formalize
their ideas. The topics of these meet-ups are often centered on found-
ing operational infrastructure, investor attraction, customers relations
and marketing strategies . These events target inexperienced founders
and soon-to-be ones. Thus a system of small and big-scale gatherings
attempts to overcome the lack of entrepreneurial density in Istanbul. In-
deed, many in the business say that this may be the only solution to a
“chicken and egg” problem: a well-developed entrepreneurial network
attracts further founders and investors to join and expand the commu-
nity, however there has to be point to start from, and such a point is cre-
ated by Startup Turkey, Startup Istanbul and all the smaller events
around the city that build networking platforms in a developing entrepre-
neurial environment.

A second important set of geo-social factors that influence the entre-
 preneurial ecosystem within a given territory are urbanism and gentrifi-

cation. Since the 1973 oil shock Western societies have often been
identified as being post-materialistic and knowledge-based (Bell, 1973;
Inglehart, 1996). Such terms bear deep implications on individual
choices, such as what city to chose as long-term residence and what
professional ideal to pursue. This argument is made under the premise
that entrepreneurs are educated and knowledgeable people. In the
post-materialistic societies that prevail nowadays in the Western world,
cognitive and physical stimulations are a necessity for gathering and
processing the vast amounts of information required for individual devel-
opment. On an urban level, this knowledge-based society’s pursuit of a
stimulating environment finds implementation in processes of gentrifica-
tion (Williams & Smith, 1996). People with high cultural capital ,the so-
called creative class, tend to gather and redesign certain urban areas
to meet their demand in culture and other stimulating factors. This phe-

nomenon tends to oust itself in the restoration of those urban areas, the
installation of institutions meeting the demand of the creative class and
thus creating an attractive environment for them to live in. Let’s assume
that entrepreneurs indeed are members of such a creative class with a de-
mand for high cultural capital — this would imply that they prefer to settle
in gentrified urban areas that meet their needs for culture and information.
Indeed this previously been seen in the San Francisco Bay Area, Tel Aviv,
Stockholm and New York’s Meatpacking District, where gentrified neigh-
borhoods define the local urban picture, and where the educated middle-
class modernized certain parts of the city in order to create an attractive
living space for themselves. These high-quality standards also sparked
the attention of entrepreneurs who started to settle in respective cities and
developed their own professional macro cosmos in order to gradually de-
velop global startup-hubs. Gentrification moreover necessarily requires
GENTRIFICATION modernization, which in turn requires innovation. Startups indeed create
innovation through explorative processes of creation and optimization, ide-
EARLY STAGE PRODUCT ally integrating their product into the demand of a given community. This
DEVELOPMENT becomes easier in gentrifying areas as a high demand for innovating prod-
ucts exist and thus direct environment of the entrepreneur turns into an
early-stage low-risk testing space for his product.Thus gentrification not
only attracts entrepreneurs to gather in often-condensed neighborhoods,
but its characteristics create an almost self-fulfilling prophecy for the de-
velopment and early stage assessment of a product.







Istanbul, however, is notorious for its resentment of gentrification which
 peaked in the symbolic Gezi Park protests in 2013, where people ex-

GENTRIFICATION pressed their deep concerns against a gentrification of the city as well as
its capitalization and modernization, amongst other socio-political con-
cerns. The specific emotions and reasons underlying these sentiments
are often related to economic-existentialist fears and an immediate sense
of relative deprivation. Istanbul has a historic community of non-Muslim
shop owners who feel that Erdogan’s modernization policy will drive them
out of business and thus, out of Istanbul. Indeed, Turkish government has
dedicated $100 billion to city’s urban renewal and apart from huge infra-
structural projects like a 3rd bridge between Asia and Europe, Bosporus-
tunnels and a new airport, some 50,000 buildings are meant to be either
renovated or torn down due to earthquake-related safety precautions.
These plans as such seem to be throughout positive at the first glance,
however they bear a bitter overtone. Many argue that the government
uses its construction policies to drive out minorities, serve nepotist struc-
tures in the real estate and construction sectors and inflate rents in urban
areas to generate higher tax revenues from upper-class influx. In fact
many are convinced that a significant part of the 5,600 houses in Okmey-
dani that are being considered for demolition, are in perfect condition. So
are another 5,500 houses in Tozkoparan. This issue was raised by many
GENTRIFICATION AND and eventually required a supreme-court decision; moreover Daily Sabah,
ARE OFTEN STALLED BY a pro-government newspaper argued “Those districts host shanty neigh-
POLITICAL GRIEVANCES borhoods where houses and other buildings lack building permits [...] An-
other common characteristic of many areas in those districts is that they
provide recruitment for terrorist organizations which find support amid im-
poverished, unemployed youth and children of migrant families.” (Daily
Sabah, 2014) Such lavish justifications naturally spark protests against
modernization and urban innovation processes and evoke general an-
tagony against such among Istanbul’s people. A 15-year old Gezi Park vic-
tim, pupil Berkin Elvan, has been elevated to a symbol of a martyrdom
against urban changes and institutionalized groups have been blocking
gentrifying processes ever since.

Yet numerous less radical and arguably more effective advances have
been made in order to modernize Istanbul in friendly cooperation with its
inhabitants. Since 2013, the Design Atelier Kadikoy (TAK) is acting as a
platform for nearly three dozen urban planners and designers who are
aiming at bringing together interest groups, architects and construction
companies to find satisfying solutions to traditional problems of the city’s

urban environment. (The Guardian, 2014) Some ten years earlier there
have been similar efforts in Karaköy, a district lain on the European side of
the Bosporus, which indeed has become a place for the young and crea-
tive of Istanbul housing hip restaurants and bars that attract a new genera-
tion of city dwellers; however the bigger picture is less bright and moderni-
zation efforts are either launched by the AKP’s politics of nepotism, or
blocked by frustrated inhabitants of the city. This in turn scares away the
creative classes and often leaves a vacuum of innovative knowledge and
progress in the urban areas of Istanbul. A possible influx of entrepreneurs
is blocked by their sheer fear of moving to an environment that antago-
nizes change and modernization, two main ingredients of successful entre-

Only on the second look, do sheer geographical factors seem relevant to
CONCLUSION an entrepreneurial ecosystem. However spatial density of likeminded peo-
ple and gentrified urban areas where modernization and innovation are ac-
cepted components of society are catalytically enhancing the successful
formation of groups and societies that are part of an entrepreneurial eco-
system. As communities build, will the hip and gentrified district of
Karaköy become the new hotspot for city’s entrepreneurs? Or will Levent,
Istanbul’s flourishing financial district, or some yet undiscovered part of
the city where the creative class will settle? As geographical variables are
hardly mobile, it will most likely be the development of urbanism and gentri-
fication that will determine further advances of entrepreneurial culture. Re-
publican George Christopher was San Francisco's mayor from 1956 to
1964 and his gentrification policies were somewhat comparable to those
of Recep Tayyip Erdogan nowadays. He executed most of them against
the will of the people and drove many out of the city. Author James Bald-
win (1963) said that “San Francisco is engaging, as most northern cities
now are engaged, in something called urban renewal, which means mov-
ing the negroes out […] It means negro removal, that is what it means. The
federal government is an accomplice to this fact.” Both policymakers — Er-
dogan and Christopher — may have been following immoral and ujust mo-
tivations when deciding legislation upon construction in San Francisco
and Istanbul, yet what one does learn from Christopher’s actions is that
one can indeed create a hyped and attractive city by modernizing it and
hence enabling a cultural revolution within its communities. Should the
Turkish society keep this in mind and sacrifice the happiness of some
dwellers for a sustainable well-being in the long run?

In order to understand institutional behavior on the macro scale of an entrepreneurial ecosystem it is
essential to grasp the characteristics of and the interaction between individuals on the micro level
first. The way humans position themselves vis-à-vis the concept of entrepreneurship and their talent
for such. It is moreover crucial to consider the diversity of entrepreneurs within a given ecosystem to
identify what is possible and what simply isn’t. On the first note, individual spirits in Istanbul are funda-
mentally different and it is hard to make a generalized thesis on this topic. This is mainly due to the
fact that the city has an unlikely high number of relevant variables that determine how people think
about entrepreneurship; one has to take into account nationality, religious affiliation, political identifica-
tion, prior and current involvement into other business sectors, level as well as kind of education re-
ceived and prior founding experience. A rather broad observation suggests that Istanbul is still lack-
ing entrepreneurial mindset and talent in order to compete with global startup hubs like San Fran-
cisco, Tel Aviv or Berlin, however this due to the destination’s nascent development and is very likely
to change once local entrepreneurs gain experience in the course of the years

An effective starting point is the assumption that there exists an often-
ENTREPRENEURIAL unique culture of entrepreneurship that is underlying a specific entrepre-

CULTURE neurial ecosystem. Culture as defined by Schwartz (1992, p.7) “consists
of the derivatives of experience, more or less organized, learned or cre-
ated by the individuals of a population, including those images or enco-
dement and their interpretations (meanings) transmitted from past gen-
erations, from contemporaries, or formed by individuals themselves […]”
This definition carries three implications that let us examine the impor-
tance of entrepreneurship culture among individuals in Istanbul.

I. Experience implies that there has been a history of given practice
within a given set of people.

II. A culture calls for some form of organization most likely reflected in
an institutionalization of certain cultural structures.

III. Last, members of a culture adopt common practices in order to dis-
tinguish themselves from the rest of society.

Thus culture manifests itself gradually among a given set of people
through common beliefs and ideologies, processes of thought and prac-
tices of communication. However Istanbul houses a very young entrepre-
neurship ecosystem. What started in Silicon Valley in the 1960s, in Tel
ENTREPRENEURIAL SKILLS Aviv in the 80s only arrived in Istanbul in the mid-00s. Basic entrepreneu-
rial skills are still to be consolidated in order to create an ecosystem that
lives up to the expectations of a global startup hub. Entrepreneurs need
to gain experience and carry their companies beyond the seed phase in
order to have a lasting impact on the scene. Moreover institutions have to
organize themselves around the idea of entrepreneurship, both SMEs
and large enterprises. Prof. Erhan Erkut, founder of MEF University in Is-
tanbul emphasized precisely this problem in our dialogue. “The Turkish
society is in no way an entrepreneurial society, no one teaches you how
to found your own company.” (Erkut, 2015, App. A) Similar issues can be
found on the investors’ side. Equity-donors are mostly self-made million-
aires, who reinvest in order to fuel Turkey’s entrepreneurial spirit, small
VC firms, who raised capital from their partners, and small local incuba-
VOLUME, NOT QUANTITY tors as well as accelerators. Yet one of the only institutionalized angel-
OF INVESTMENTS IS THE structure in Turkey is Istanbul’s Galata Business Angels, a close-knit net-
INVESTORS SIDE work of business angels mostly engaging in mutual venture investments.
However as we discuss later, the prevalent problem remains not the
quantity of investors, but the volume of investments. Other problems
seem to lie in the mindset and expectations of the Turkish upper class,

which has been keenly investing in the construction businesses for the
last twenty years but neglected entrepreneurship for most of the time. Un-
deniably construction seems to be the more reasonable investment,
given that Turkish urbanization demands for increasing housing opportu-
nities in cities’ centers. A granted high ROI and a good portion of well-
dosed conservatism are thus the underlying structural causes for an un-
derdeveloped entrepreneurial culture on the investors’ side in Turkey.
What is often depicted as the ideal city for startups does — in hindsight
— not appear to be so ideal after all.

A second important factor within the individual dimension of entrepre-

POOL OF TALENT neurial ecosystems is the talent of its actors. Talent is an essential — yet
not exclusive — prerequisite for success and can be either created or im-
ported. The previous discourse on gentrification already highlighted
some important aspects for the import of entrepreneurial talent such as
how attractive given destination is in terms of cultural capital and its
grade of modernization. This shall be thus not be discussed in further de-
tail, however one additional aspect shall be highlighted at the end of this
chapter; it concerns the return of talent. In order to conclude upon that
point it is however essential to understand the domestic creation of tal-
ent. As entrepreneurship is an intellectually demanding activity, ranging
from the exploration and development of a good or service to its sales,
talent will be measured by the intelligence of an individual as his soft
skills, whose development are often excluded when assessing some-
one’s cognitive capabilities. Of course intelligence, expressed in terms
of the IQ, is to a certain extent a matter of chance as the concentration,
location and movement of crucial molecules in the brain mass are geneti-
cally predetermined and thus not influence abilities. However another
part is the heritability of intelligence and its development through sociali-
zation. However empirical evidence suggests that children from parents
belonging to higher classes, as determined by wealth, prestige and
power (Weber, 1922), are more likely to be born with a higher IQ than
those born into a lower class. Although the causes underlying these find-
ings are still largely disputed, some scholars argue that health disparities
between classes and discrepancies in the support as well as conduct be-
fore and during pregnancy lead to brain structures that ultimately render
one person more intelligent than another (Gottfredson, 2004, 2011).
Child’s long-term socialization is then crucial for the development of his
intelligence by influencing quantity and quality of synapses’ growth in its
brain. Kohn and Schooler (1983) argue that parents from higher classes

raise their children teaching them reflection and individual judgment
while lower-classes value conformity and acceptance. This creates envi-
ronments of action and reaction for children of higher classes, while
lower-class children often encounter apathy and disinterest. As a result
further discrepancies in class-related IQ’s evolve due to the environment
that children are born into. Bourdieu (1986, pp. 246) expands this theory
by arguing that children of richer families are confronted with more cul-
tural and individual networks than those of poorer families, which indeed
make them, develop syntactical brain structures faster and more effec-
tive than children of lower classes. This model implies that richer, yet at
the same time fairly equal societies, bear more individual talent than
poorer ones or societies with large socioeconomic inequalities where the
median income is skewed to the far left compared to an average one.
When looking at a city like Istanbul it is impossible to make absolute
statements on talent, yet its development can be benchmarked against
POVERTY IN TURKEY SUNK, that of other cities to evaluate the population’s talent in relative terms. Pov-
erty in Turkey sunk from 16.4% in 2005 to 2.3% in 2011 while income dis-
CONSTANT tribution stayed constant with the upper 20% of the population earning
around 45% of the 2014 national income (The World Bank Group, 2015).
This means that while the country got richer in absolute terms, socioeco-
nomic class distribution stayed the same. When looking at Istanbul by it-
self however, these values change dramatically. “In Istanbul, 29% of in-
come goes to the richest 1% of population (18 000 households). The
monthly income of the richest 1% citizens of Istanbul is 322 times higher
than that of the poorest 1%. This income is higher the than total income
of three developed Turkish cities (Izmir, Ankara, and Bursa) and almost
equal to the total income of the Black Sea region. The lowest income
group in Istanbul (25% of population) has only 5.9% of the total income.”
(Akpinar & Saatci, 2007).

These alarming statistics identify another of Istanbul’s problems: high lev-
els of social stratification lead to huge development gaps among the
population (Kohn & Schooler, 1983) and only allow for a handful of indi-
viduals to acquire high levels of social and cultural capital. It appears
UNIVERSITIES IN THE that Istanbul, although being above average on a national scale, has
COUNTRY country’s highest rate of stratification. This is reflected by an Turkish aver-
age IQ of 90 with the one of Istanbul being roughly seven points higher
yet it also being the city with the largest standard deviation of its popula-
tion’s IQ (Maas et al., 2006). Istanbul moreover has the chance to house
the best universities in the country. In fact four of the country’s six best
higher education institutions are in Istanbul (World University Rankings,

2015). The city’s prestigious education is rooted a continuous financing
helped to uphold the high standard. Such findings now allow for two con-
clusions to be drawn. First, Istanbul has a suboptimal socioeconomic
situation characterized by high stratification that prevents children from
lower classes to develop their personal capacities to their full potential.
Passing of redistributive policies, that would counter-balance these ten-
dencies, seems unlikely considering the upholding tradition of AKP’s
PEOPLE FROM ALL OVER THE nepotism and related corrupt practices. Hence assuming that intelligence
ISTANBUL FOR EDUCATION and soft skills, two factors that are substantial for entrepreneurial talent,
are based in socioeconomic variables, Istanbul is substantially flawed in
exercising its entrepreneurial potential to the highest possible. Second,
the city’s excellent universities attract talent from all over Turkey and
abroad. In fact, there are considerable amounts of students coming from
as far as Pakistan to get their diplomas at one of Istanbul’s universities.
This entails Istanbul’s regional dominance in educational prowess that can
be capitalised into considerable gains in entrepreneurial activities. A quali-
tative assessment of these issues is included into Appendix A, where we
talk to Prof. Dr. Erhan Erkut about the situation of human capital in Turkey.


Istanbul’s entrepreneurial ecosystem, despite its high-growth po-
tential, remains a nascent one compared to Silicon Valley or Tel
Aviv. Yet our report maintains that the ecosystem will grow at an
exponential rate due to convergence of entrepreneurship-
friendly factors. This growth can be further accelerated, if cer-
tain structural obstacles related to access to finance and regula-
tory environment are permeated. This section will provide gen-
eral characteristics of Istanbul’s ecosystem, before conducting
in-depth analysis of structural elements, comprising the startup

• Turkey assembles characteristics, necessary • From the chart below we inspect that entrepre-
for the development of startup ecosystem: neurship in Turkey has been on the rise, though
most firms have started focusing on the domes-
• Web penetration in Turkey was at 46.62% in tic market rather than on the international.
2014, well above regional or global averages.
• The past 5 years witnessed a considerable rise
• Turkey’s young demographics - half of the 76 in venture capital funding, with players crucial
million population is aged 30 and below - and
to the ecosystem emerging, alongside with net-
its increasing web (68.7%) and mobile (92,5%)
works of business angels. The total volume of
penetrations. Furthermore, more than 90% of
venture capital investments is about $100 mil-
mobile users are connected to the Internet,
alongside with lofty social media connectivity
percentages. • Other institutional investors such as banks or
pension funds are still reluctant to engage in
• Increasing credit card usage, with credit card VC funding, but the landscape of VC invest-
spending volume topping 40.8 billion Turkish
ments is projected to change
liras in 2014, up from 35 billion in 2013, accord-
ing to the Turkish Interbank Card Centre. • The Turkish ecosystem is largely a clone mar-
ket and thus level of structural innovation is lim-
ited. However, by copying already tested busi-
60 ness models Turkish entrepreneurs acquire
necessary business management skills and
48 thus gain valuable experiences.

36 •The juggernauts in the sphere are largely


E-commerce firms, thus creating unequal sec-
24 torial distribution in the startup scene. Preva-
lence of E-commerce over other sectors is
12 largely due to the existent and dominant on-
line retail infrastructure combined with high
credit-card penetration.
2006 2007 2008 2010 2011 2012 2013
•Turkish universities have limited capabilities
Improvement-Driven Opportunity Entrepreneurial Activity
in developing entrepreneurial qualities. Sen-
Nascent Entrepreneurship Rate
International Orientation Early-Stage Entrepreneurial Activity ior management positions are largely limited
SOURCE:: GLOBAL ENTREPRENEURSHIP MONITOR to those who have received foreign educa-
tion, as a result.

Undoubtedly, one of the most important determinants of entrepreneurship is access to finance, as it
allows the entrepreneurs to develop their product, launch their venture or scale up their activities.
This necessitates a certain level of capital mobility and development of financial services. Istanbul’s
venture capital financing is unfortunately lagging behind all other major startup hubs. There are lim-
ited institutional investors, both in quantity and in volume of investment, as there is a general lack of
private capital engaged in venture capital investments. Access to finance relies on a close-knit struc-
ture of investors, most of who are based in Istanbul. Those investors are either self-made millionaires,
who are passionate about entrepreneurship and reinvest their assets, or small VC funds that raise
venture capital from limited partners, such as holdings, conglomerates or insurance companies.

There are two main reasons to the limited volume of VC investments in Turkey.

Firstly, most investors are still prioritizing liquidity over long-term commitments – however this is the
wider symptom of the whole financial system, rather than a problem of VC itself. And yet our report
projects that the Turkish banking sector can successfully facilitate capital provision, as the combined
asset size of Turkish banks exceeds $800 billion. Adding to that, Turkish banks exhibit robust charac-
teristics - high capital adequacy ratio (16%, while minimal requirement is 8%) and a low number of
non-performing loans (3%). The second reason for a limited volume of investments is that institutional
investors in Turkey prefer traditional, stable return offering sectors such as construction or real es-
tate. This is partly linked to the efficiency gains point mentioned in our introduction – Turkey could still
reap efficiency gains and grow based on them. Hence, investors choose to invest in sectors that will
bear them stable returns, rather than committing themselves to long-term, high value-added invest-
ments. However the authors of this report acknowledge the speed of changes in the sphere of VC
and forecast that the status quo in Istanbul is bound to change as the Turkish economy advances
and financial structures develop further.

Throughout our meetings with investors in Istanbul, we have witnessed that the limited volume of in-
vestments is also partly due to the entrepreneurs themselves. As reported by multiple investors, it is
difficult to find suitable enterprises to invest in, as entrepreneurs do not demonstrate necessary quali-
ties and degree of professionalism. This is partly because Istanbul’s ecosystem is nascent and has
not thoroughly experienced the trial-and-error period. As a result, the investment selection procedure
is inverted, as VC funds look for sophisticated entrepreneurial personalities rather than innovative
business plans. However for most entrepreneurs, access to VC funds means access to a larger net-
work of institutional investors as well as invaluable mentorship. To further develop the ecosys-
tem, a lot of gradual work has to be done on entrepreneur and investors’ parts, respectively. The fol-
lowing section will address different sources of financing, available to Istanbul’s entrepreneurs. This
will also include lists of investors, limited partners, institutional investors and government support pro-
grams. A forecast for the future will complement the overview.

Istanbul’s VCs are incomparable to Silicon Val- • Though a handful of VC funds are highly spe-
ley’s vibrant and dynamic venture capital culture cialised (Teknoloji Yatirim A.S. in biotech), due
and represent a fraction of VC investments made to the ecosystem’s limited development, a VC
in Tel Aviv. Yet as the ecosystem develops further, funds specialisation is largely absent
VCs will gain sophistication, breadth, expertise
and capital. • Domestic VC funds are mostly professionals
with extensive experience in private equity in-
FIGURE 1.2: LIST OF MOST ACTIVE FC FUNDS IN TURKEY vestments and often hold foreign education.
Those domestic VCs are mostly early-stage
Inovent Young Turk Ventures Teknoloji Yatirim A.S. Lab-x funds, focusing on the product development
stage rather than the profitability of startups.
iLab Ventures 212 Ltd. Big Bang Ventures KOBI Girisim
• Limited partners that contribute to Turkish VCs
are most commonly holdings, conglomerates
Rhea Istanbul Esas Holding String Ventures Doga Ventures
and banks, usually family based and owned,
such as Koç Holding, Limak Holding, Akbank,
3TS Capital Aslanoba Capital Earlybird VC Revo Capital Garanti Bank, Tahincioglu Holding or FIBA hold-


Investor Type Location Fund No.
European Investment Fund Private Equity Fund of Funds Manager Luxembourg 3
European Investment Fund Private Equity Fund of Funds Manager Luxembourg 3
European Investment Bank Bank Luxembourg 2
International Finance Corporation Government Agency US 2
KfW Banking Group Bank Germany 2
ACG Capital Private Equity Fund of Funds Manager France 1
Adam Streets Partners Private Equity Fund of Funds Manager US 1
Alaska Permament Fund Corporation Sovereign Wealth Fund US 1
Alpha Associates Private Equity Fund of Funds Manager Switzerland 1
ATP Private Equity Partners Private Equity Fund of Funds Manager Denmark 1
Bpifrance Investissement Private Equity Fund of Funds Manager France 1
European Commission Government Agency Luxembourg 1
Groupe Bruxelles Lambert Corporate Investor Belgium 1
Intel Capital Private Equity Firm US 1
Liberty Mutual Insurance Insurance Company US 1
Malakof Médéric Insurance Company France 1
Wesley Clover Private Equity Firm Canada 1

• Foreign limited partners that invest in venture funds come
from a wider domain of sectors. Their list, country of origin
and number of matching funds can be found in Figure 1.3

• Foreign VCs are more focused on growth and later-stage
financing. Foreign VCs mostly come in when Turkish start-
ups need to scale their operations and generate revenue.
This tendency is largely due to foreign VCs limited exper-
tise of Turkey’s domestic market dynamics.

• Until recently, co-investment funds or so-called “fund of
funds” have been absent from Istanbul’s startup scene.
However Istanbul Venture Capital Initiative (iVCi) has been
formed following the example of the European Investment
Fund. It is the first “fund of funds” initiative in Turkey and
so far has leveraged over $1,5 billion of third-party capital.
Below you can find the portfolio of iVCi with commitments


Fund name Commitment, € millions

3TS Capital 6

Eurasia Capital Partners 5.6

Pera Capital Partners 15

Mediterra Capital Partners 20

ADM Capital Partners 24

Crescent Capital 15

Darby Private Equity 17.5

Actera Group 40

Abraaj Group 2

Earlybird Venture Capital 25

Globally, as well as in Turkey, business angels cial for a nascent ecosystem such as Istanbul,
are enjoying increasing recognition as a prefer- which is still growing, learning and developing.
able source of finance. Their organisation and
huge pools of capital, combined with invaluable • At the moment, there are 265 certified busi-
ness angels Turkey, licensed by the Financial
mentoring sways entrepreneurs over from ven-
Markets Regulatory Department. There are mul-
ture capital funds. Angels as a rule prefer early-
tiple incentives applied to stimulate BA invest-
stage ventures, even before the entrepreneur de-
ments, the most sound being 75% income tax
velops a beta-version of the product. Business
deduction.Turkish business angels increas-
Angels in Istanbul can offer a competitive alter-
ingly need foreign business angels for better
native to VC funds and pioneer the advance of
access to exit capital, as well as greater mar-
the already vibrant, but nascent startup scene.
kets and business development opportunities
• Angel structures are yet to be fully active, their
exposure is rather limited – BAs are mostly en- • According to the EY M&A 2014 report, most
active business angel investor were Galata
gaging in mutual venture investments. How-
Business Angels, who have performed 10 ac-
ever with successful entrepreneurs who are
quisitions, acquiring stakes in various con-
willing to make risky investments for the sake
sumer service and IT companies, with the dis-
of the ecosystem, the picture is bound to
closed deal value totaling $3.6 million
change. The last couple of years have also wit-
nessed emergence of network of business an- • However this number is insignificant in com-
gels, such as Galata Business Angels, to coor- parison to Haslan Aslanoba’s investments
dinate investment efforts across BA commu- made in 2013. Believer in Turkey’s technologi-
nity. cal potential and business angel pioneer, Asla-
noba poured $30 million into 30 companies,
• Although BAs act primarily as a source of capi-
envisaging a snowball effect on the Turkish
tal, their competitive edge lies in vital know-
venture capital stage. Alike Aslanoba, other
how, which is transmitted through mentorship,
successful entrepreneurs followed.
and in their networks. These qualities are cru-

Business Angels Business Angel Networks
Sina Afra Galata Business Angels
Caglar Erol Turkish Business Angel Associations
Cem Sertoglu BIC Angels
Nevzat Aydin Keretsu Forum
Emre Kurttepeli Istanbul Business Angels
Birol Kabakoglu Sirket Ortagim
Haluk Elci BUBA Angels
Devrim Demirel Sofia Business Angels

Institutional investors, excluding VC funds, are re- The Turkish government, realising the enormous
luctant to engage in startup-related investments potential that technology startups bear, has
directly and limit their engagement by only con- launched numerous initiatives to support entrepre-
tributing to funds as limited partners. Instead, neurship financially.
they rather engage in revenue generating or
short-term-profitable ventures. • Hence the government as launched initiatives
for startups in high-growth sectors as well as
• Turkish banks are largely conservative lenders R&D funds for technological innovations
that prioritise liquidity over long-term commit-
ments, which is a reflection of the whole Turkish • Nevertheless there is a lack of efficient govern-
ment startup programs, where beneficiaries re-
lending market, not only the attitude towards VC
ceive mentorship and networking skills, not only
investments. Banks’ engagement in the startup
monetary support
scene is limited to donations in accelerators as
well as a handful of corporate incubator-like pro- • Brander, Du & Hellman have concluded that en-
grams and corporate social responsibility initia- terprises that receive funding from government-
tives, such as those pursued by TEB and SA sponsored sources often outperform those re-
Banci. However their engagement in startup ceiving only VC funding. However this hypothe-
scene is rapidly increasing. sis is yet to be tested in Turkey’s case, as gov-
ernment programs are yet to develop success-
• Family endowments and holdings serve mostly
ful companies
as limited partners in VC funds and do not di-
rectly invest in startups, except for a handful of • The Turkish government could also do more
exceptions that were due to personal connec- while cooperating with VC funds or as some of
tions our sources propose, create a VC fund of their
own, or even a government-backed “fund of
• Other financial intermediaries, such as pension
funds”. Turkish government efforts could also
funds, conglomerates, sovereign wealth funds
be more efficiently aligned to support crowd
or insurance companies do not conduct direct
funding platforms as alternative means of ven-
investments into startups, but are increasingly
ture financing, to lessen entrepreneurs’ depend-
present as corporate sponsors in accelerators,
ency on VC funds
incubators and as limited partners in VC funds

TRPE Capital Wesley Clover
Is Girisim Intel Capital

Gozde Girisim Bpifrance Investissement TOBB Genc Girisimciler

Actera Group ATP Private Equity Partners Teknoloji va Sanayi Bakanligi
Turkven Alpha Associates
Darby Private Equity Adam Streets Partners

ACG Capital Microsoft Ventures
This part of the report will focus on Istanbul’s startups: main characteristics, prevalent challenges and
sectorial dynamics. Turkey’s tech startup sector is characterised by rapidly evolving sectorial dynam-
ics and hence vastly changing entrepreneurial conditions. However, existing support structures and
barriers to entry, largely due to Turkey’s economic development, favour some sectors over others. It is
thus pertinent to analyse tech startups competitive predisposition vis-à-vis its foreign and domestic
competitors. Rest assured, Turkey represents a swiftly evolving emerging market with vast market po-
tential for tech startups.

As mentioned in the sections above, Turkey’s tech startup scene is described by many as a clone
market. The gist of critique towards clone market lies in one argument: clone companies do not con-
stitute to real innovation in the economy. This claim bears weight, considering that entrepreneurial
ecosystems need gradual evolvement and trial-and-error processes in generating business models.
In that perspective, innovation in Turkey is stalled as entrepreneurs rally to copy a successful foreign
business model rather than innovating their own. Though theoretically valid, this view is rather short-
sighted and neglective towards the acute benefits of successful clone companies. And the benefits
of growing clone companies are two-fold. Firstly, whether clone or novel, replicating successful busi-
ness models provides Turkish entrepreneurs with the necessary business management experiences.
As a nascent hub, Istanbul needs entrepreneurs with wide array of experiences in operational man-
agement, business development, customer relation management and other spheres. Even through
clone companies, Turks develop their entrepreneurial muscle and increase their operational effi-
ciency, which has been described as a structural obstacle towards more developed financing struc-
tures. Hence, clone companies provide the necessary experiences for Istanbul’s tech startup scene
to develop and grow. Secondly, Turkish clone companies in order to survive against a larger and
more experienced international competitor must induce operational innovation and outsmart their in-
ternational counterparts. The following example perfectly illustrates how local clones, by tailoring
their business model to local needs, gain operational edge and hence innovate. Learning how to sell
is important and benefits of clone companies should not be neglected.

Bitaksi is a Turkish clone of Uber, ride-sharing application. Though Uber is present in Istanbul, it
takes smaller share of cab-riders than Bitaksi. Due to local know-how, Bitaksi has better supply
chain networks, i.e. taxi drivers, than Uber does. By further employing flexible pricing strategies
for both drivers and riders and replicating an interface which is as functional as Uber’s, Bitaksi
manages to seize the market of an international competitor by meeting certain operational standards
and using the local know-how to establish themselves in a contested market.

Clone companies are prerequisite for a vibrant and innovative startup scene. Through development
of operational efficacy and business management practices, Istanbul’s scene grows, matures and in-

Istanbul’s startups have demonstrated speedy adaptability to changing conditions – a characteristic
that signifies the enormous potential of Istanbul’s tech sector. This vital characteristic has been devel-
oped as a result of diminishing costs of entry. Diminishing costs have allowed more Turks to realise
their dream of pursuing their own venture, hence adding up to booming tech startup sector in Istanbul.
We herewith suppose that diminishing costs of entry for startup were the result of these 4 converging

I. Decreased costs of connectivity

II. Increased data storage capabilities

III. Decreasing costs of cloud technology

IV. Emergence of alternative means of venture financing such as crowd funding

As such, more Turkish startup could minimise their dependency on tech industry giants such as SAP or
IBM for data storage provision or Turkish telecom giants such as Turkcell. We further project that costs
to entry will further diminish and Turkish enterprises will become more adaptable and flexible.

There are two main challenges that Istanbul’s enterprises have to deal with, apart from the aforemen-
tioned lack of funding or lack of relevant experiences. Most of the enterprises in Istanbul remain in their
early-seed stage, as the transition to product development and revenue generation has many barriers
to entry.

• Scaleability becomes a true issue for Istanbul’s innovators due to limited private capi-
tal. Lack of private capital determines that entrepreneurs do not acquire necessary
funds to scale up their operations and expand neither domestically nor internationally.
Unbalanced focus on revenue growth vis-à-vis long-term disruptive goals further exac-
erbates expansion. On the other hand, entrepreneurs lack essential supplies chain
management skills and do not have access to distribution channels. Hence many of
high-impact enterprises sell-out to international juggernauts of the sphere, such as
Google or IBM – this is done through selective corporate partnerships

• Disruptive enterprises are lacking in Istanbul’s sphere. Most of startups seize exist-
ing market opportunities (such as E-commerce) rather than innovate. This is due to
unbalanced attention paid to revenue growth. However this tendency is prone to
change as Istanbul’s ecosystem matures and develops. In coming decade (or less),
many innovative ventures will bore out of the scene in Istanbul.


Though startups in variety of sectors are apparent at early-stage phase of venture development, those
who have passed product development stage usually come from handful of sectors, such as gaming,
E-commerce, digital media or online-offline integration. However it is important to stress that this dy-
namic is bound to change as Istanbul’s ecosystem moves forward. Sectorial convergence is absent in
Istanbul in comparison to other startup hubs. Nonetheless as entrepreneurs grow, the ecosystem will
create numerous startups that will offer services in a variety of sectors. However as advances are made
in mobile technology – on-going driver of investment opportunity – sectorial dynamics are likely to

Istanbul’s scene has seen cases of both vertical and horizontal integrations. Example of vertical inte-
gration of a firm is Yemeksepeti, a food delivery service that has expanded to 5 MENA countries, after
receiving considerable funding. There are multiple cases of horizontally integrated ventures; most of
them are from E-commerce sector.

As almost 99.7% of Turkish firms are SMEs, there are enormous market realisation opportunities for
B2B services, such as information management systems, big data analytics and accounting manage-
ment. More to that, sectors such as fintech are growing perspective as payment methods become
more sophisticated. The following table contains description of sector development barriers with rele-
vant infrastructures.

Below you can find a table with analysis of sectorial barriers to entry. Certain infrastructures are obvi-
ously more developed than others. Because certain startup sectors necessitate existence and develop-
ment of certain infrastructure, for instance payment service development and soundness are necessary
for fintech. Hence predominance of certain infrastructure over others leads to predominance of some
sectors over others. Destructing the barriers that limit entrance of enterprises can thus increase secto-
rial differentiation. Nevertheless, these are not all of the sectorial entrance constraints, as there are
more of them, related to regulatory environment for instance; yet those will be analysed in the following


Infrastructure Description

Supply of data storage capabilities is sufficient, with big players such
as IBM, Microsoft and Intel offering their services to Turkish
Cloud-technology entrepreneurs. Overall cloud-technology infrastructure is well
developed and there are hardly any barriers to entry due to
underdeveloped cloud technology infrastructure.

There is no harmonised product-testing infrastructure in Istanbul, nor
in all of Turkey, hence entrepreneurs need to rely on their investors
and their access to networks for fluid product testing. Absence of
coordinated product-testing infrastructure hampers product
development and slows down operational efficiency of the whole
Istanbul has no or other equivalents; hence
entrepreneurs often have to go the extra mile themselves. Absence
of beta-client testing network slows down product development
Beta-client network
phase for startups. Furthermore, beta-client network could drastically
improve Istanbul’s startup’s customer relations management and
incrementally increase customer satisfaction
There are not affordable alternatives to market research services,
apart from those offered by public relations, marketing or market
Market research
research companies. However the pricing these companies offer
often exceeds entrepreneur’s budget constraint
Technological adoption as well as scientific output are rapidly
Scientific laboratories and
increasing in Turkey, however more needs to be done to increase
coordinated efforts between scientific sectors and private sector
At the moment, payment service industry is limited to credit card
usage, however with new entrants in the sphere of fintech this is
Payment service industry bound to change. Moreover, existence of coordinated efforts from
banks to facilitate payment service development may offer better-
leveraged alternatives to Turkish entrepreneurs
Istanbul offers wide range of marketing services with flexible pricing
Marketing services
options. However mobile advertising is still underdeveloped.
Istanbul’s transport infrastructure performs in line with infrastructures
Distribution channels of European capitals, hence there are no barriers to entry because of
distribution channels
Below you will find a sectorial risk matrix of Istanbul’s ecosystem. One should notice that these condi-
tions and predictions are not binding and are changing rapidly as the ecosystem evolves together with
Turkish economy. This matrix represents investments risk as of today and does not take into account
possible future developments. If we were to project future developments, all of the mentioned sectors
would seem as perspective, as they represent huge market realisation opportunities that are un-
touched in Turkey.

• Horizontal axis represents potential market realisation, i.e. what kind of potential market ca

the startup seize. As the axis moves to the right, the size of potential market realisation in-
creases. E-commerce represents a huge market segment in Turkey, while healthcare startups
are still to emerge in the scene, partly due to potential market realisation – healthcare sector
requires wealthy and aging population, while e-commerce requires technology-friendly and
young populace that is willing to do retail shopping online.

• Vertical axis represents diminishing entry barriers as the axis moves upwards. Specific entry
barriers have been discussed in previous pages, but are not limited to those indicated in Fig-
ure 1.8. Entry barriers relate to specific infrastructures that some sectors necessitate develop-
ing, scale and succeeding.

• Sectors coloured in light grey represent high risk of investment, meaning in the current cir-
cumstances they will not bear immediate results and make take a long time to fully develop.
Those coloured in black represent low risk of investment – necessary infrastructures are set
in place and the sector might expect faster liquidity than other sectors. Those coloured in
dark grey represent medium risk of investment.

Social Media Digital E-commerce


News Portals Online-Offline Gaming

Healthcare Entertainment Fintech

While embarking on a tech venture, investor bears in mind that at a certain point in the future in-
vestment will have to bear monetary results, in other words enterprise will have to perform an exit
to the market, for venture capitalist to liquidate his or hers investment. There are several types of
possible exits: IPO, M&A or through partial liquidity event. Reliable exit environment with adequate
pool of capital is of paramount importance to the ecosystem – seeing successful market exits; en-
trepreneurs get inspired to pursue their ventures.

• Exit environment is a function of general economic picture; hence if macroeconomic environ-
ment remains prosperous, exit environment will improve as follows. In comparison to other
startup ecosystems, time from VC financing to exit is prolonged in Turkey due to limited capital,
deficient operational efficiency and maturing tech sector

• There is a general lack of successful exits in Istanbul as well as in Turkey. Furthermore, success-
ful exits are performed largely by international companies that seek to broaden their customer
outreach or acquire Turkish clone of their business model. However as fintech, mobile and other
sectors advance in Turkey, major Turkish conglomerates will get interested in diversifying their
revenue base and hence pursue of tech startups.

• Below you can find list of successful exits in Turkey starting from 2006. Exit through an IPO has
not been realised in Turkey yet, due to a low number of publicly traded companies and general
market capitalisation.

Firm Exit(Date Exit(Type Exit(Value(($million)( Acquirer

Cinemars(<(Mars(the(Cinema(Professionals Aug$06 Trade,Sale 19.4 Mars,Entertainment,Group

Tuyap Feb$07 Sale,to,Management $ $

Step Jul$08 Sale,to,GP 6.75 Swicorp

ITD(Iletesim(Teknoloji(Danismanlik(A.S. Jul$10 Trade,Sale 3.94 Asseco,Group

GiGgidiyor Apr$11 Trade,Sale 235 Ebay,Inc.

Markafoni Jul$11 Trade,Sale 200 Allegro

Mekanist Jan$15 Trade,Sale $ Zomato

Joygame Feb$13 ParKal,acquisiKon 15 CJ,Games Sep$06 Sale,to,Management $ iLab,Ventures

Pozitron(Yazilim(A.S. Feb$14 ParKal,acquisiKon 36 MoniKse,Group
CiceksepeN Dec$11 ParKal,acquisiKon $ Amazon,Inc.

Hebsibura Feb$15 ParKal,acquisiKon 100 Abraaj,Group

Human capital is playing an ever-increasing role in entrepreneurial ecosystems; tech startup hubs
are often sources of innovation, which themselves are dependent on a solid educational infrastruc-
ture. Higher education is inextricably linked with startup hubs as it provides the necessary skill-set
and attributable qualities for entrepreneurs to pursue their ventures. Furthermore, educational out-
put is necessary in order for innovation to occur, especially within the scientific community. Inves-
tors, realising the huge potential offered by higher education institutions, open up on-campus incu-
bators, organising tailored events or investing at a more general level in campus facilities and op-
portunities. For the startup community to flourish and generate significant output, coordination be-
tween educational facilities and enterprises is an imperative and examples of such startup hubs
include the likes of Silicon Valley and Tel Aviv, both cases which support this claim. This section
will examine human capital in Istanbul as well in the rest of Turkey; its strengths, deficiencies and
the sizeable opportunities associated with it. .

• Higher education is largely accessible in Turkey and especially in Istanbul; there are
about 180 institutions of higher learning in Turkey, including private universities, techni-
cal universities, institutes of technology and academies of fine arts

• The quality of higher education in Turkey remains questionable, however. According to
the World Economic Forum’s Global Competitiveness Index, Turkey ranks 85th out of
144 countries, based on the quality of higher education, signaling Turkish institutions’
limited capacity to supply the labour market with highly qualified labour, as well as the
limited capacity of the labour market itself to absorb new graduates

• Efficient use of talent is another area of concern within Turkey as it ranks 133rd out
of 144 countries in the same Global Competitiveness Index. Hence, we can conclude
that even though higher education may be accessible in Turkey, it lacks breadth, rele-
vance and quality vis-à-vis universities in the developed world

• With regards to the entrepreneurial ecosystem, our sources indicate that the quality of
highly skilled labour is adequate, in particular for those specialising in computer sci-
ence and engineering. This gives us a mixed picture concerning the pool of talent in
Istanbul and its effects on the startup scene

Entrepreneurial education is highly deficient within Turkey, yet the picture is changing. Only one
university in Turkey has seen an on-campus incubators set up - Ozyegin University - although
some other universities, such as MEF University, have developed specialised programs (pro-
grammes if British!) equipping students with entrepreneurial “muscle”.

• Lack of entrepreneurial education is linked to the overall low quality of Turkish institu-
tions of higher learning. According to one of our sources, “Turkish institutions fail to
equip prospective graduates with necessary skills using which they can adapt to
ever-changing market conditions.”

• Entrepreneurial education is, however, rapidly changing as a result of three factors:

I. Increase in the number of courses focusing on entrepreneurship and the
tech startup sector in business, engineering and other related studies

II.Increase in the number of moves to build on-campus xxxxx, now accessi-
ble in many universities

III.Increase in the number of corporate partnerships between private busi-
nesses organising on-campus events such as hackathons or corporate on-
campus incubators/accelerators

• This report predicts an increase in coordinated efforts between the educational sector
and the private sector, due to increased private investment aimed at fostering greater
entrepreneurship. In the future we can expect that Turkey’s pool of talent will be more
efficient and coordinated and the entrepreneurial ecosystem in Istanbul will greatly
benefit from such development. Below you can find a table with a list of Turkish univer-
sities that are of vital importance to the tech startup community and the whole entre-
preneurial ecosystem


ODTU Sabanci Universitasi Bogazici Universitasi Bilkent Universitasi

Koc Universitasi Ozyegin Universitasi ITU TOBB ETU

Bilkent Universitasi IYTE MEF Universitasi Kadir Has Universitasi

This chapter will overview existing business support structures in Istanbul and more broadly in Tur-
key. It is vital for an entrepreneurial ecosystem to have functioning support structures since these nur-
ture enterprises in development of their early phase. Seed phase development is of crucial impor-
tance as it is the determining factor for an enterprise’s survival and further functioning. Support struc-
tures can be classified into several segments: incubators and accelerators, the regulatory environ-
ment and industry networks. Incubators/accelerators make sure that entrepreneur's ideas see the
light of day and constitute the backbone of any tech startup scene. Across the world and especially
in developed ecosystems such as Silicon Valley, accelerators/incubators are renowned for their pio-
neering efforts to foster innovation. Appendix B includes an interview with directors of Fit Startup Fac-
tory – the first startup accelerator in Turkey. Another vital business support structure is the regulatory
environment as this can effectively foster enterprise-creation and help to diffuse knowledge across
sectors. The third type of support is found in industry associations and networks – their role in dis-
seminating knowledge across the startup community is also of crucial importance.

• Recently, Istanbul has become home to multiple incubators and accelerators of vital
importance to the ecosystem. Some of these incubators are set up in partnership with
universities and institutions of higher learning (Girisim Fabrikasi, Koc Incubation),
while others are supervised by successful entrepreneurs who are passionate about
the ecosystem (such as E-tohum). It is worth noticing that Turkish incubators/
accelerators are also active in the wider Middle East – Fit Startup Factory organises
events in Saudi Arabia, while E-tohum has launched an entrepreneurship center in

• Furthermore, these incubators, boot camps and accelerators attract a considerable
array of investors and partners, ranging from corporate sponsors to family founda-
tions. These conservative name-lenders, otherwise absent from the tech startup
scene, are thus actively involved in enterprise building and disseminating their knowl-
edge and expertise to the startups

• Another important feature of incubators/accelerators in Istanbul is the numerous op-
portunities they offer entrepreneurs in different sectors (such as tech) or business
models, (B2B or B2C). Initiatives also exist to support entrepreneurship within larger
companies, in other words, intrapreneurs, also an emerging phenomenon.. Intrapre-
neurs are vital for the ecosystem, as they already are part of a larger enterprise that
has supply networks, customer base and vital capital

• Incubator/accelerator differentiation is also characterised by the duration of their pro-
grams. Each program has different corporate partners that in turn incentivise active
sharing of know-how within a given sector, such as big data analytics.

• Different incubators/accelerators also offer programs tailored to either horizontal or ver-
tical business integrations. Girisim Fabrikasi, or Fit Startup Factory, has 4 different pro-
grams for entrepreneurs: Technology Focused Acceleration, Vertical Acceleration,
Bootcamp for Intrapreneurs and Corporate Incubation

• Incubators/accelerators in Istanbul for their services ask for a considerable share in eq-
uity in return for mentorship, networking and investments. Of all the components of the
ecosystem in Istanbul, incubators and accelerators bear a striking resemblance to
other ecosystems with more investors and greater operational efficiencies. Istanbul’s
accelerators also train Turkish startups to participate in international incubator/
accelerator programs such as Ycombinator or 500startups, that are renowned for their
ability to produce successful ventures

• Istanbul’s incubators and accelerators are vital to nurturing the nascent startup scene,
as they ensuring knowledge transfer, coordinated partnerships and formal training for
entrepreneurs. Improvement is nevertheless desirable, as incubators/accelerators
need to increase their pool of financing to enable scalable ventures. Additionally, more
could done with respect to coordinating initiatives with institutions of higher education


Girisim Fabrikasi E-tohum

Turk Teleko Pilott Koc Incubation

Startup Bootcamp SUCool

TEB Girisim Evi Viveka

Founder Institute Girisim Savascisi

A favourable regulatory environment is paramount for a fully functioning and fledging ecosystem.
The Turkish government, realising the potential of tech sector for accelerating economic growth, has
launched number of initiatives. This report concludes, however, that the regulatory environment is
still unfavourable in Turkey. The government needs to do more if they want to follow up on their prom-
ise of promoting entrepreneurship, not to mention their pledge to support tech-infused innovation in
the economy.

• Starting a business in Turkey is still an unnecessarily lengthy and exhausting proce-
dure. According to World Bank Group’s “Doing Business Survey”, Turkey lags behind
Eastern Europe and OECD countries in regulatory frameworks. It takes 7 procedures
to set up a company in Turkey and it requires 16.4% of income per capita for paid-in
capital, compared to 4.8 procedures and 8.8% of paid-in capital in OECD countries

• Taxation is also draining the operational efficiency of Turkish ventures. According to
the aforementioned “Doing Business Survey”, senior managers in Turkey spend 19%
of their working-time dealing with government regulation, compared to 9.8% spent by
senior managers in OECD countries

• Enforceable legal rights are also vital for enrepreneurship as this can either alleviate
operational costs or burden firms unnecessarily. Turkey scores 3 out of 12 in the legal
rights index according to World Bank Group. The depth of credit information still lags
behind OECD countries and the Insolvency recovery rate is twice as low as in devel-
oped countries.

• The government needs to do more to attract foreign capital as well as stimulate domes-
tic VC investments. Business Angel tax deduction law is a good example of how this
can be achieved and the incumbent government needs to stimulate the growth of the
tech startup community and facilitate its expansion

• However, alternative regulatory measures have been taken in Istanbul to foster entre-
preneurial development. Borsa Istanbul, Istanbul’s official stock exchange, has
launched the Private Market Program, granting access to investors and publicly traded
companies and to entrepreneurs seeking financing. These kinds of initiatives are very
important to the community, as they stimulate crucial information sharing

All in all, this report concludes that the regulatory environment in Turkey is unfavourable for stimulat-
ing the development of the startup ecosystem. Steps need to be taken to alleviate regulatory burdens,
coordinate initiatives and attract more investments to the sphere.
• The report notes that numerous industry associations and networks have undertaken initia-
tives to foster entrepreneurship and high-growth sector development in Istanbul. These are
formal organisations that incorporate different segments of the ecosystem.

• These industry associations, facilitate entrepreneurial development through events or men-
toring. They serve as a networking platform for investors and entrepreneurs. In addition, as-
sociations provide the training necessary for startups to succeed

• Some of these associations are international and these enable Istanbul’s entrepreneurs to
access international networks of mentors and investors, vital for expanding to global mar-
kets or scale up operations

• Furthermore, industry associations educate the public about entrepreneurship efforts and
generate publicity for selected startups. Annual events, such as Startup Turkey – the largest
startup community conference in Turkey - are evidence of this. Other initiatives include En-
deavour Turkey, that encourages mentoring.

• Industry associations may also act as investors. In this case, they act in an identical way to
VC funds


Endeavour Turkey Ashoka Turkey

Turkish WIN UGM


TEPAV Startup Turkey


Within the three discussed dimensions, geographical predisposition is certainly the most static one. En-
trepreneurial ecosystems do necessarily have to exist in the environment they were born into, allowing
only small variations in expansion and relocation. Determinant facts of these dynamics are gentrifica-
tion and urbanism, which are both heavily dependent on the people’s mindset, purchasing power and
the surrounding policy environment. Meanwhile, in Istanbul there exists a dangerous mix of objectives
underlying these variables: politicians want to urbanize for nepotist reasons, communities developed
resentment against urban modernization. This currently blocks an influx of the creative class, yet
can be solved through a change in structural approaches to the topic and an improved cooperation
between political incumbents and those who decide over the urban landscape as well as the people

Individual characteristics have been identified as another crucial factor for the development of entre-
preneurial ecosystems. Macrostructures have underlying micro entities and they are heavily reliable on
their mindset and performance. As of Istanbul, huge class disparities lead to an unequal distribution of
talent among the population. Very few have the majority of talent and opportunities while a huge num-
ber of people are deprived from an exposure to sufficient social and cultural capital due to their eco-
nomic struggles. This creates inefficiencies and causes one-sided enhancements. Structural
changes in redistribution as well as education systems are necessary to overcome these obstacles.

Our findings in institutional settings section were mixed. Istanbul has indeed a thriving tech startup
scene, however certain structural obstacles limit its development. Lack of private capital, entrepre-
neurial experiences, successful exits and sectorial differentiation are among them. As Turkish econ-
omy develops further and as global technology advances, barriers to entry may diminish, leading to a
more differentiated spectrum of startups. Business support structures are efficient, but more coordina-
tion with investors needs to take place. Additional investments into higher education and smart reforms
to alter the deficient regulatory environment are also necessary for the scene to fully flourish.

Therefore, in comparison to other startup hubs, such as Silicon Valley or Tel Aviv, Istanbul is severely
lagging behind – yet the picture is bound to change. As entrepreneurial ecosystem matures, positive
developments will follow shortly.

I. Hofstede, Geert "Management Scientists Are Human"

II. J.Richardson (Ed.) "Handbook of Theory and Research for the Sociology of Educa-

III. Akpinar, E. & Saatchi, E. "Assessing Poverty and Related Factors in Turkey"

IV. "Beyoglu neighborhoods set for renewal" Daily Sabah (2014, June 4)

V. "Gentrification tears at Istanbul's historically diverse fabric" Reuters (2014, Octo-
ber 29)

VI. Gottfredson, L. "Intelligence: Is it the Epidemiologists Elusive "Fundamental Cause"
of Social Class Inequalities in Health"

VII. Gottfredson, L. "Intelligence and Inequality - Why the Biological Link?"

VIII. "Istanbul's gentrification by force leaves locals feeling overwhelmed and angry"
The Guardian (2014, July 2)

IX. Global Entrepreneurship Monitor

X. World Bank Enterprise Survey 2014

XI. World Bank "Doing Business" Survey 2014

XII. World Bank's Global Financial Development Database

XIII. Prequin Venture Capital Database


Prof. Dr. Erhan Erkut is a vital figure in Turkish start-up scene – a pioneer in entrepreneurship
education. Through his numerous initiatives such as on-campus incubators and entrepreneur-
ship centres, Professor Erkut seeks to bridge the gap between the educational institutions and
the labour market. We have met him at MEF University, where he assumes position of a deputy
dean, to speak about his experience in Turkish start-up scene, as well as the role of education in
fostering the culture of innovation ,disruption and surely, creativity.

For years, you have been involved in edu- One cannot notice thatTurkish start-up
cational initiatives that sought to instill scene is dominated by e-commerce
entrepreneurial values in students. Why firms, especially in the size of valuations.
are these initiatives crucial for Turkey? How would you explain this trend?

Alike the majority of people involved in entre- Since recently, Turkey had no e-commerce
preneurship in Turkey, I had spent large infrastructure, thus it natural that certain
part of my life outside Turkey. Upon my re- firms would want to seize existing markets.
turn to Turkey I have found two specific At the moment, however, there are roughly
things direly unsettling about university edu- 70 million smartphone users in Turkey, com-
cation: the lack of entrepreneurship-related bined with abounding credit card and web
research and the lack of on-campus busi- penetration. $820 billion economy with a
ness incubators. In times when labour mar- relatively well-connected population is a
ket demands recent graduates to exhibit in- truly fertile ground for e-commerce firms. I
novative thinking, universities ought to would be a bit more skeptical about valua-
equip students with these skills – hence the tions – anyone in start-up community will
source and inspiration for my endeavours. know that enterprise valuation processes is
rather tricky.
How in your opinion has Turkish start-up
environment changed over the last 5 Can this in turn explain why Turkey is
years? leading the MENA region in web-related
Recent 5 years have definitely positive de-
velopments for Turkish entrepreneurs. We Yes, it can surely explain a part of it. And
saw a rise in venture capital funding – cru- Turkish reach extends beyond the region –
cial players such as Aslanoba Capital, 212 with an example of Etoham launching entre-
Ltd. and Galata Business Angels have en- preneurship centres in Pakistan. Rather
tered the game. We also saw the gradual, than boasting the gains, Turkish policy-
yet necessary, emergence of entrepreneur- makers could learn a great deal from other
ship education for undergraduates. Turkish countries, such as Chile, on how to incentiv-
entrepreneurs, seeing the example of sev- ise entrepreneurship related-activities, in or-
eral successful exits, have been motivated der to develop the tech sector and acceler-
to innovate. Positive change has definitely ate further.
come, yet major challenges still need to be


Founded in May 2011 under the wing of Ozyegin University, Fit StartUp Factory was the first
Turkish technology-focused accelerator of its kind. After highly selective admission procedure
only a handful of selected start-ups enrol in a 5-week long programme. Along with full-scale busi-
ness model development, entrepreneurs access mentoring and financing networks by working
with a multitude of both corporate partners and serial entrepreneurs. All of this is aimed at devel-
oping, what Factory’s directors wittily describe as, ‘entrepreneurial muscle’. To discuss the vari-
ous aspects of this entrepreneurial body-building as well as overall opportunities for Turkish
start-up scene, we have met with Emran Turan at the last week of his tenure as the director and
his soon-to-be successor, Yasemin Eren.

Since the inception of Fit Startup in 2011, In the light of these positive developments,
how has the climate for start-ups changed? what challenges for the entrepreneurial eco-
system remained further unresolved?
Emran: Even before 2011, the major change
was surely the financial meltdown of ‘08 – the Emran: One thing that we need to keep in
demand for newly created jobs was surging, mind is that 99,7% of Turkish companies are
and tech start-ups served as an incentive to SME’s. Thus scalability has remained a rea-
innovate while becoming self-employed. With sonably pressing issue – making successful
this, we gradually saw social taboo against exits hard for the start-ups. We are then stuck
dropouts vanish – higher education was not with lots and lots of intellectual property start-
anymore seen as a must-have as long as busi- ups that hardly have a product in place. In
ness opportunities were pursued. this climate, venture capital funding will surely
be constrained.
Yasemin: To a great extent, large corpora-
tions started identifying entrepreneurs inter- Yasemin: Start-ups have to think global from
nally and rewarding them for their creative the very beginning. In this case, the scale of
mind-sets. This in turn has helped accelerator global problems increases – companies strug-
programs to emerge and flourish. gle with customer development, business op-
erations, entrance to new markets as well as
However there had to be a breaking point
supply chain management. And as often hap-
that allowed incubators and accelerators to
pens, entrepreneurs lack resources and net-
enter the so-called startup and tech game.
works to ensure global competitiveness.
Yasemin: The way I see it is that inside these
By now you have probably heard and seen
corporations, accumulated knowledge would
thousands and thousands of pitches. What
amass, which eventually had to be shared. It
would be the major issues entrepreneurs
was thus a question of time when that would
usually struggle with?
Emran: One thing entrepreneurs should defi-
Emran: Yet another factor that greatly aided in
nitely focus on is taking feedback from ven-
the development of such programmes was
ture capital investors – second-opinion might
the format of funding – usually banks would
be invaluable, especially if it comes from a
provide seed funding, usually less than 200k,
field professional. Another issue that entrepre-
which would turn out to be absolutely crucial
neurs negligently omit is their inter-personal
to the entrepreneurs. In addition to this, they
communication skills. Ability to communicate
would not ask for equity stakes in the start-up,
is what makes the pitch attractive to investors,
thus allowing entrepreneurs to assume full con-
and if they do not develop those qualities –
trol over their enterprises. Funding schemes,
venture will never even see the light of the day
initiated by the government, would leverage
entrepreneur’s liabilities to the banks – thus Yasemin: Entrepreneurs often forget to iden-
dispersing risks and encouraging innovation. tify two most important components of their

venture – their market and their assets. With- a buy-out of a start-up by a larger counter-
out that, their product development will lose part.
its strategic outlook and relevance. And identi-
Turkey is often described as a clone-
fying even the intangible assets can surely
market, where successful business models
provide firm coherence to the business strat-
are replicated to suit local preferences.
egy – and this is where accelerators like us
Does it influence venture capital funding
can help the entrepreneurs.
On this note let’s move to evaluating busi-
Emran: Common misconception is that all
ness support infrastructures for entrepre-
clone companies are unequivocally success-
neurs – what are the major developments
ful in Turkey – this is not the case, as only a
or lagging when it comes to product devel-
part of them succeed. And those who do suc-
opment base?
ceed just seize the existing markets, with e-
Emran: The picture is rather ambiguous – commerce companies dominating the scene.
while certain infrastructures may exist, they In these circumstances, venture capital funds
are often not adapted for entrepreneurs spe- reluctantly commit to risky investments in dis-
cifically. Cloud computing infrastructure is ruptive tech companies. This is amplified by
rather developed, with big companies provid- general lack of business angels, with several
ing storage access – however the issue of exceptions. Several past years saw a more co-
pricing prevails, as many start-ups simply can- ordinated effort for organising business angel
not afford these services. When it comes to investments. In the future, as start-up ecosys-
product beta-testing infrastructure or beta- tem matures, we will surely see upward capi-
client networks, the picture is rather bleak. Tur- tal mobility in VC investments, a natural proc-
key has no equivalent of of ess that Turkish ecosystem ought to go
some sort – entrepreneurs have to go the ex- through.
tra mile themselves.

Yasemin: Improvements in the sphere of B2B
SaaS are also rather limited. Softwares for in-
ventory management or pricing strategies are
largely underdeveloped with big companies
providing software that is out of entrepre-
neur’s price range. Yet there are an amount-
ing number of partnerships between large
companies and start-ups to develop business
solutions in a specific sector. This way, gained
knowledge is diffused across the sector – a
positive externality that is absent in a case of

Figure 1: R&D motivations for companies categorized by age and size

Figure 1.1: Entrepreneurship in Turkey

Figure 1.2 List of most active VC funds in Turkey

Figure 1.3 List of foreign limited partners

Figure 1.4 iVCi Portfolio

Figure 1.5 Lists of Business Angels in Turkey

Figure 1.6 Private equity firms engaged in VC investment

Figure 1.7 Government agencies or programs targeted at supporting entrepreneurship

Figure 1.8 Sector entry barriers

Figure 1.9 Sectorial risk matrix

Figure 1.10 List of exits in Turkey

Figure 1.11 List of Institutions of vital importance to entrepreneurial ecosystem

Figure 1.12 List of incubators, accelerators and boot camps in Turkey

Figure 1.13 List of entrepreneurship-related industry associations

Figure 1.14 Entrepreneurial ecosystem’s comparative competitiveness