Turkish Startup Investments Review
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Turkish Startup Investments Review Q2 2021 KPMG Turkey 212 kpmg.com.tr 212.vc Foreword Welcome to the Q2’21 edition of the Turkish Startup Investments Review with the collaboration of KPMG Turkey M&A and the 212 teams. This report is the fourth edition of our quarterly review. Our goal is to highlight key trends, opportunities, and challenges facing the venture capital market globally and in Turkey. Ali Karabey 212 Q2’21 was the period of recovery and optimism. Thanks to the COVID-19 vaccination, the global macroeconomic situation Managing Director [email protected] started to stabilize, which began to create a positive atmosphere around the globe. The uncertainty for the future started to normalize, the global venture market reached a new quarterly record high leaving behind the previous record investment volume in Q1’21. Turkey’s venture ecosystem continued to follow its upwards trend in line with the World. Turkish venture market maintained its remarkable activity, as the volume of startup investments increased by 43% from Q1’21, reaching another quarterly record with 57 deals totaling an investment volume of $727M. In Q2’21 two mega-deals took place with investments exceeding $100M, which constituted 97% of total quarterly funding. Dream Games became the fourth unicorn of Turkey, receiving an Gökhan Kaçmaz investment of $155M with a valuation of $1B, and Getir got one step closer to becoming a decacorn by raising $550M with a KPMG Turkey valuation of $7.5B. Head of M&A Advisory, Partner [email protected] More than a year into the COVID-19 outbreak, the global startup ecosystem looks more robust than ever. Today, technology startups are the protagonists of the world, as they lead the transformation of our lives and businesses. It is apparent that startups will continue to gain significance and play critical roles in our lives as we adapt to new world standards. Over the past few months, COVID-19 has played a catalyst role in the growth of the startups ecosystem. Exponential acceleration in digital transformation forced by the pandemic led to a long-term and faster development of startups. VC investment volumes continued to increase as we moved on to the second half of 2021. We hope you find our Turkish Startup Investments Review report insightful. If you would like to discuss any of the information Özge İlhan KPMG Turkey in more detail, please contact KPMG M&A or the 212 teams accordingly. M&A Advisory Services, Associate Director [email protected] Source: Crunchbase Turkish Startup Investments Review Q2 2021 3 Index Page Page Main highlights in Turkey’s startup Breakdown of startup deals by 5 ecosystem in Q2 2021 11 quarters Page Page Top 10 startup deals in Q2 2021 Major Turkish outbound & diaspora 7 13 deals Page Page Breakdown of startup deals by Insight 8 sub-sector 15 Page Page Breakdown of startup deals by Book / Podcast recommendations 9 origin of the investors 17 Page Page Startup deals according to their Turkey’s startup deal list 10 investment stage 18 Turkish Startup Investments Review Q2 2021 4 Main highlights in Turkey’s startup ecosystem in Q2 2021 Although the number of VC deals continued to decline in Q2’21, VC Delivery & Logistics, Gaming, Marketplace, and Fintech were the verticals investments volume reached $153.3B eliminating the previous record volume that attracted the most investments by deal volume, respectively. In terms set in Q1’21. Following the stellar activity in global venture funding, in Q2’21, of the number of deals, as in Q1’21, Gaming led the way, followed by the number of newborn unicorns peaked by reaching 136, shattering the Fintech, Healthtech and Saas. Turkish gaming industry continued to grow and previous quarterly record for unicorn births. remained the most popular and sought-after vertical among investors. Three of the largest ten transactions in Q2’21 were in the gaming industry. Turkish startup ecosystem attracted $727M of investment in 57 deals. Investment volumes reached a quarterly record high in Q2’21, with a 43% In Q2’21, five of the largest ten deals were acquisitions. GarajSepeti was increase from the previous record set in Q1’21. acquired by Kavak Intermediate Holdings for $25M. Rollic Games acquired 100% of Uncosoft for $20M. Getir acquired 15.60% of BiTaksi for $3M. 50% It is worth noting that two mega transactions constituted 97% of the deal of Momento, a company operating in marketingtech vertical, was sold to volume. Excluding investment rounds completed by Getir and Dream Games, the Turkish fintech company Param and Nazara Technologies, an India based 55 startups received an investment of $22M in Q2’21. In Q1’21, after gaming company that acquired 69.82% of Publishme. eliminating $478M raised by Getir and Dream Games, the investment volume was slightly higher, totaling $31M. Contrary to the macro-economic uncertainty and instability of Turkey, the ventures ecosystem performed better than expected. Turkey produced two Getir raised $550m in its Series D round in June 2021, tripling its valuation to different unicorns namely Getir and Dream Games in the first half of 2021. $7.5B, including the new capital, barely three months after its last financing Considering that the total amount of unicorns born in Turkey is four, the first round. There were no lead investors for the round. After becoming a unicorn half of 2021 was exceptional. in Q1’21, Getir took a fast and huge step for becoming a decacorn. Dream Games raised $155M Series B investment in June 2021, led by UK-based investment firm Makers Fund and US-based investment firm Index Ventures. Dream Games became the fourth startup in Turkey to reach a valuation of $1B. Source: Startups.watch, Crunchbase Turkish Startup Investments Review Q2 2021 5 Top 10 startup deals of Q2 2021 Announcement Financial Investor's Deal Investment Rank Target Company Sector Investor Stake (%) Date Investor Origin Value($m) Stage Delivery & Silver Lake, Mubadala Investment Company, Later VC 1 Getir June 2021 Ye s USA, UAE 7.33% 550.0 Logistics Tiger Global, Sequoia Capital Stage Kora, Institutional Venture Partners, Makers Early VC 2 Dream Games Gaming June 2021 Ye s USA, UK 15.50% 155.0 Fund, Balderton Capital, Index Ventures Stage 3 Garaj Sepeti Marketplace Kavak Intermediate Holdings June 2021 No Mexico 100.00% 25.0 Acquisition 4 Uncosoft Gaming Rollic April 2021 No Turkey 100.00% 20.0 Acquisition Early VC 5 Ödeal Fintech SPG Holdings June 2021 No USA 9.91% 3.2 Stage 6 BiTaksi Transportation Getir April 2021 No Turkey 15.60% 3.0 Acquisition 7 Momento Marketingtech Param June 2021 Ye s Turkey 50.00% 2.0 Acquisition 8 Publishme Marketingtech Nazara.com June 2021 No India 69.82% 2.0 Acquisition Internet of Early VC 9 Trio Mobil 212 (Fund II) June 2021 Ye s Turkey NA 2.0 things Stage Ak Portföy Teknoloji GSYF, Boğaziçi Ventures 10 Veloxia Gaming (BV Growth), Collective Spark (Fund II), Randa May 2021 Ye s Turkey 20.21% 1. 4 Seed Stage Selin Dilmener Göral (Private Investor) $550M Largest deal $550MLeading sub-sectors #15 Later VC Stage investment from US-based VCs Delivery & Logistics Gaming was the Sequoia Capital, Tiger Global, Silver Lake and UAE- was the leading leading sub-sector by based investment firm Mubadala to Turkish delivery sub-sector by deal number of deals. and logistics company, Getir volume. Source: Startups.watch, KPMG Analysis Turkish Startup Investments Review Q2 2021 7 Breakdown of startup deals by sub-sector By transaction volume | $ k Significant deals in the sectors 1 1 $550.0M investment to Getir 2 2 $155.0M investment to Dream Games 178,400 25,200 7,321 4,000 550,000 3 Acquisition of GarajSepeti by Kavak 4 5 3 804 766 693 400 300 150 118 100 79 60 50 50 50 2,170 1,103 3,000 2,620 2,460 Intermediate Holdings for $25.0M SaaS Book Travel Med�a 4 $3.2M investment to Ödeal F�ntech enabler B�otech Gam�ng Mob�l�ty Art�f�c�al Agr�tech Telecom Log�st�cs Foodtech Del�very& Educat�on Reta�ltech Blockcha�n Healthtech �ntell�gence Ecommerce Ecommerce Marketplace Transportat�on Market�ngtech Acquisitions of Momento and 5 Internet th�ngs of Publishme for $2.0M By number of transactions | # Leading verticals 15 • In terms of the funding • Uncosoft’s sale to Rollic raised, the verticals receiving Games for $20M was one the highest number of the of the largest deals of the 10 transaction were Gaming, quarter and another significant Fintech, Healthtech, Software transaction that took place in as a Service and IoT startups. the gaming industry. 5 5 4 • Excluding the mega • Marketingtech vertical 3 3 3 transaction of Getir, the saw two deals where both 2 2 2 1 1 1 1 1 1 1 1 1 1 1 1 gaming industry is at the top transactions were acquisitions in terms of both deal size and with deal sizes of $2M. number of transactions. Even Momento sold 50% of its if the $155M transaction of stakes to Param, a SaaS Book Dream Games is disregarded, Turkey-based fintech company Travel Med�a F�ntech enabler B�otech Gam�ng the gaming industry maintains for $2M. On the other hand, Mob�l�ty Art�f�c�al Agr�tech Telecom Log�st�cs Foodtech Del�very& Educat�on Reta�ltech its first place by deal size. India-based gaming company, Blockcha�n Healthtech �ntell�gence Ecommerce Ecommerce Marketplace Nazara Technologies acquired Transportat�on Market�ngtech 69.82% of Publishme for Internet th�ngs of $2M. Source: Startups.watch, KPMG Analysis Turkish Startup Investments Review Q2 2021 8 Breakdown of startup deals by origin of the investors Deal volume (USD million) 43 Local Investor USA India 553,2 156,1 25 UK Germany 780 2,0 0,1 0,1 737 Mexico Austria Foreign Investor Number of deals 58 1 Local Investor USA India 2 1 66 UK Germany 1 2 8 Mexico Austria 1 Foreign Investor Source: Startups.watch, KPMG Analysis Turkish Startup Investments Review Q2 2021 9 Startup deals according to their investment stage Number of deals by investment stage Deal volume by Investment Stage (USD million) 9 4 1 Acquisition Early VC Stage Acquisition Early VC Stage 52 160 53 17 Later VC Stage Seed Stage Later VC Stage Seed Stage 550 • Although Seed Stage transactions had the highest number of deals with 52 transactions, Seed Stage investments recorded the lowest deal volume with $17.0M in Q2’21.