InvestmentsMiddle EastStartups

Investors put fintech, health care, gaming ventures on radar

Following a year that marked a record amount of funding in the Turkish entrepreneurship ecosystem, investors have turned their focus to ventures operating in gaming, e-commerce, finance and health care sectors.

The coronavirus pandemic did not prevent the Turkish ecosystem from receiving a total of $139 million (TL 1.06 billion), which was invested in 165 startups throughout 2020, according to startups.watch data.

In addition to e-commerce and gaming ventures, there is also a noteworthy increase in the appetite of venture capital and institutional investment funds in finance and health care startups

While a majority of the investments in 2020 were made in gaming startups, Istanbul-based Peak, Turkey’s first unicorn – a billion-dollar venture – marked the largest investment in Europe. At the beginning of 2021, on-demand rapid delivery pioneer Getir raised $128 million from investors.

Regulation effect

The regulatory decisions are now expected to bring along a major dynamism in financial technology investments.

Having bought Turkish digital payments company iyzico for $165 million two years ago, global fintech company PayU is said to be positioning for the Turkish market, while other foreign investors are waiting for the results of the regulatory decisions.

There have been more than 55 applications to the Central Bank of the Republic of Turkey (CBRT) regarding electronic money and payment technologies, from telecom and e-commerce to the energy to the retail sector.

There are also institutions including one of Turkey’s leading information and communication technologies companies, Türk Telekom, and energy companies such as Limak Energy that are said to ready to take action with the regulation decisions.

In addition, banks are trying to gain agility with their investment decisions in financial technology startups. Lastly, private lender DenizBank’s venture capital venture, Deniz Ventures, invested $1 million in Midas, the new generation investment application.

Midas provides easy and commission-free investment in Turkish and U.S. stocks.

Istanbul: City of game studios

Turkey attracts attention with startups in the field of sports, especially mobile gaming. According to startups.watch data, Istanbul is a city that hosts the most game studio investments just after London.

Investments in gaming startups also gained momentum in other cities, including Ankara, Denizli, Eskişehir and Izmir.

The founders of the gaming startups that managed to make exits also prefer studios in the Anatolian region as investors. Lastly, Brew Games recently managed to receive a seed investment of $4 million, followed by Mafia Games with $411,000.

Interest in health care ventures

Investing in the technological infrastructure of Turkey’s new-generation megacity hospitals that are being built across the country, Türk Telekom also shows interest in health technology startups.

These investments gained momentum during the pandemic period. Health care ventures in Turkey are developing groundbreaking solutions, both for the outbreak and diseases that fight against time, like cancer.

Drawing attention with an artificial intelligence (AI) solution and mobile application developed in the field of digital pathology, Virasoft received an investment of $1.9 million in 2020 from TT Ventures, Türk Telekom’s venture capital subsidiary.

Founded in 2015, Virasoft’s digital pathology solution is currently used in all Acıbadem hospitals, three public hospitals in Istanbul and 20 more hospitals. With the investment of Türk Telekom, Virasoft’s service is also expected to be used by the city hospitals.

TT Ventures General Manager Muhammet Özhan stated that approximately 800 million doctor appointments are made annually in Turkey.

“During the COVID-19 outbreak, we see the sacrifices our health care workers make,” Özhan said. “We increase the technological ability of our doctors and hospitals. We aim to offer more technological solutions to our doctors to make these appointments more efficient. We see that Verisoft’s technological capabilities will offer a global solution. They have also convinced global investors. We invested $1.9 million in this investment tour,” he noted.

$1 million investment in new generation app

Turkey’s private lender DenizBank has made its first investment under the umbrella of Deniz Ventures, which it established to support the innovation and entrepreneurship ecosystem in Turkey.

Deniz Ventures invested $1 million in the Midas application, which provides easy and commission-free investment in Turkish and U.S. stocks.

Established with the aim of making stock investments accessible and fair, Midas provides no commission for Turkish stocks up to a certain volume and low fixed fees for U.S. stocks with no commission. As the first and only brokerage house in Turkey, Midas also offers a guaranteed $500,000 insurance opportunity in its overseas accounts and free live data broadcasting from U.S. stock exchanges.

Gürhan Çam, the group manager of DenizBank Digital Generation Banking and Deniz Aquarium Innovation & Entrepreneurship Center, stated that they consider supporting the entrepreneurship environment in Turkey as their priority, with the awareness that the era we live in is built on an ecosystem understanding.

“DenizBank is a bank that carries innovation in its DNA since the day it was founded and pioneers the industry in technology. Finally, with the approval of the Capital Markets Board (SPK), we established our Deniz Ventures investment fund to support our innovation and entrepreneurship efforts 360 degrees,” Çam continued.

He said that they aim to contribute to the development of the entrepreneurship and innovation ecosystem both in their institution and in Turkey.

“We are very confident in the entrepreneurship potential in our country. The dream of supporting this potential that will export to the whole world, especially after the global epidemic, excites us. We are happy to make our first investment with Midas. In the upcoming period, we will continue our end-to-end efforts to support a startup to be realized from an idea, grow and open to the world,” Çam explained.

Meanwhile, Egem Eraslan, CEO of Midas, noted that they aim for the safest investment experience with the cooperation of Deniz Ventures and DenizBank.

“This investment was a big step for Midas aiming at bank standards. We provide account insurance both in Turkey and in the U.S. for all our users. Thanks to our cooperation with DenizBank, we took security one step further,” Eraslan added.

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