2023 Turkey Startup and Investment Ecosystem: A Year in Review

ARTICLES
January 13, 2024

We successfully closed out 2023 as a productive year, though it was marked by global capital scarcity, economic and strategic uncertainty. In Turkey, devastating earthquakes and the election cycle combined with global developments made 2023 particularly challenging in terms of growth. Investments slowed and declined compared to previous years. Yet, despite these challenges, the startup and investment ecosystem continued to grow, with many new funds launched and ongoing investor interest.




We successfully closed out 2023 as a productive year, though it was marked by global capital scarcity, economic and strategic uncertainty. In Turkey, devastating earthquakes and the election cycle combined with global developments made 2023 particularly challenging in terms of growth. Investments slowed and declined compared to previous years. Yet, despite these challenges, the startup and investment ecosystem continued to grow, with many new funds launched and ongoing investor interest.

Investment Trends in 2023

Overall, a decline was observed in the Turkish investment ecosystem.

  • Seed Stage: The number of startups receiving seed investment fell by 12.5% to 271. These startups raised a total of $126.5 million, down 56% from the previous year.

  • Early VC Stage: The number of funded startups dropped 10.3% to 26, with total funding decreasing 35.6% to $94 million.

  • Later VC Stage: The number of funded startups fell by 33% to just 2, with total investment dropping 34.66% to $605 million. Notable events included Getir’s down-round in September and Insider’s $105 million raise.

Global Investment Trends and 2024 Outlook

Globally, investment trends have been on a downward trajectory for six consecutive quarters. However, positive shifts are expected in 2024 both globally and in Turkey.

Early-stage startups face difficulties in securing follow-on funding, as investors hesitate without seeing tangible results. This creates survival challenges for startups, with some strong teams forced to dissolve when timely funding isn’t secured.

Still, crises create opportunities to build. With the right teams and sufficient capital, successful exits can emerge even in tough times.

The Status of Profitable Startups

Startups close to profitability are more likely to secure investment. Ultimately, a company’s valuation stems from growth. Ventures that fail to grow or innovate cannot achieve high valuations. Profitable companies sometimes drift toward more traditional business models; unless they return to their original plans, they risk becoming post-crisis survivors that operate as conventional businesses.

Sectoral Investment Distribution in 2023

By sector, SaaS led with $32M, followed by:

  • AI – $25M

  • Gaming – $24M

  • Retail – $21M

  • Computer Vision – $19M

Key highlights:

  • In SaaS, Alternatif SuperApp (Macellan) raised $3.61M at a $62.5M post-money valuation.

  • In AI, Cerebrum Tech raised $1.8M at a $15M valuation, while Vispera raised $1.885M at a $43.2M valuation.

  • In Gaming, Passion Punch raised $4M at a $39M valuation.

Shifts in the Gaming Sector

Since 2017, at least one major gaming company in Turkey has been acquired each year. While 2023 did not see a large-scale acquisition, a significant portfolio sale took place. This trend highlights a healthy ecosystem where both investments and exits occur.

Turkey’s gaming ecosystem underwent a major shift in 2023, with hundreds of studios moving from hyper-casual to hybrid-casual and PC games. While some studios shut down, many others achieved success in these new verticals.

IPOs and the Stock Market Rally

Turkey’s capital markets gained significant momentum in 2023, with the number of investors surpassing 8 million. Many companies are awaiting IPO approvals, and millions of investors are eager to participate.

The biggest concern for investors is whether clear exit paths will exist. In mature markets, acquisitions provide one route, but IPOs also give investors confidence. If IPO criteria are revised and aligned, investor appetite is expected to grow.

Foreign Investments and Pre-IPO Funds

Foreign investment declined in 2023 due to the global downturn and lack of large-scale funding rounds in Turkey. However, Pre-IPO funds offering investment opportunities before public listings surged in popularity.

With the development of Turkey’s capital markets and increasing investor base, pre-IPO investment opportunities have become more attractive.

Boğaziçi Ventures’ Plans for 2024

As we move into 2024, Boğaziçi Ventures is excited to announce new investments. Preparations for new funds are complete, and announcements are coming soon.

Despite the challenges of 2023, the ecosystem continued to produce, grow, and attract investor interest.

Since our founding, we have grown alongside our portfolio companies. In July 2022, we launched our LinkedIn Newsletter “BV Insights”, a platform where our teams and portfolio companies share knowledge and insights.

Throughout 2023, we published 30 weekly editions and look forward to continuing the journey with our valued readers in 2024!