Talk by Emrah Yalaz, String Ventures, Istanbul @ Stanford Engineering, Feb 24 2014. Website: http://me421.stanford.edu

1. Turkey’s
Emerging
Startup
&
Venture
Capital
Ecosystem
Emrah
Yalaz
Founding
Partner,
String
Ventures
www.stringventures.com
Stanford
Engineering
European
Entrepreneurship
and
Innova@on
February
24,
2014
1

2.
Emrah
Yalaz
LeS
Chicago
for
SF
to
pursue
tech
startups
1998
2005
2007
2009
Teaching
tech
startups
Cofounded
2012
2013
2014
QRM
QRM
signed
Early
adviser
to
Silicon
employee
35
of
top
50
Interna@onal
Valley
startups
in
product
banks
in
US
Expansion
2

3. Turkey
Seems
Ripe
For
a
Tech
Boom
World's
15th,
Europe's
6th
economy
67m
mobile
users
38m
on
3G
36.5m
Internet
users
5th
in
Europe
185%
YoY
Smartphone
growth
33m
Facebook
10m
TwiXer
users
(top
10
in
World,
top
3
in
Europe)
Startup
Ecosystem
building
up
rapidly
Source:
The
World
Bank,
IMF,
TK.gov.tr,
comScore
Media
Metrix,
SocialBakers,
GP
Bullhound
LLP,
Semiocast,
Flurry
3

4. Turkey
Is
Sizeable,
Young
popula@on=76m,
median
age
=29.3
Source:
TurkStat,
UN
4

5. Istanbul
Is
The
Center
City
Center
5

6. Istanbul
+
Ankara
=
Income
+
Universi@es
Istanbul
Ankara
Source:
Time
World
University
Rankings,
UN
6

7. 20+
Early
Stage
Accelerator/Incubators
7

8. Seed
Financing
Dominated
by
Aslanoba
8

9. Startup
Ecosystem
Building
Up
2012:
<200
Angels
invested
$10m
2013:
Aslanoba
invested
$38m
in
37
startups.
Turkish
Government
introduced
75%
Angel
Investment
tax
write-­‐off,
highest
in
Europe
2014
Expected:
>600
Angels
and
$200M
9

10. Venture
Capital
Dominated
by
Foreigners
Hummingbird
$300M
fund
based
in
Belgium
$40M
in
Peak
Games
(social
gaming)
with
EarlyBird
EarlyBird
$800M
fund
based
in
Germany
Peak
Games,
seed
in
Metrekare
(real
estate
classifieds)
General
Atlan@c
$20B
PE
fund
based
in
NYC
$44m
in
Yemek
Sepe@
(GrubHub
clone)
Tiger
Global
$2.8B
PE
fund
based
in
NYC.
Mynet
(Yahoo
clone),
$26M
in
Trendyol
(Gilt
clone)
with
KPCB
RTP
Ventures
$750M
fund
of
RuNet
Holdings
in
Moscow
$3M
Investment
in
Lidyana
(fashion
ecommerce)
10

11. Marquee
VCs
and
Corps
Are
Lurking
11

12. Turkish
VCs
Play
Catch
Up
iLab
both
an
investor
and
incubator,
focuses
primarily
on
classifieds,
price
comparison
and
ecommerce
investments:
Gipgidiyor
(ebay
clone),
Kariyer.net
(online
job
pos@ng)
212VC
largest
early-­‐stage,
local
$30M
VC
fund
investments:
Solvoyo
(supply
chain),
CloudArena
(hotel
management
Saas)
12

13. Problem:
20+
Turkish
Accelerators
+
Seed
Programs
+
Angels
=
liXle
innova@on
+
lots
of
ecommerce
+
copy
cats
13

14. Why?
14

15. 1.
Not
adop@ng
US
model
to
fit
Turkey’s
ecosystem
YC
model
works
for
YC
15

16. 2.
Missing
out
on
top
talent
VCs
fail
to
differen@ate
great
technical
talent
from
good
16

17. 3.
Investors
without
innova@on
background
VCs
lack
product
and
growth
marke@ng
skills,
few
experiened
10x
tech
solu@on
17

18. 4.
Limited
connec@on
to
Silicon
Valley
LiXle
experience
about
what
Silicon
Valley
demands
and
how
it
operates
18

19. Solu@on
≠
Accelerator
Accelerator
=
Shallow
talent
pool
→
Compe@@on-­‐like
applica@on
→
Batch
Process
→
Graduated
Rapidly
→
Investment
Frenzy
at
Demo
Day
Disserves
Investors
and
Technical
Founders
19

20. Solu@on
≠
Incubator
Incubator
=
Shallow
talent
pool
→
Compe@@on-­‐like
applica@on
→
Batch
Process
→
Provide
Office
Space
→
Keep
Around
with
government
subsidies
Yields
Zombie
Startups
20

21. Solu@on
=
New
VC
Model
1.
Win
the
talent
war
early:
scout
and
recruit
top
technical
and
design
talent,
especially
at
universi@es
2.
Inject
product
know-­‐how
early
and
retain
talent
to
build
products
aiming
at
global
or
regional
leadership
3.
Place
growing
products
in
Silicon
Valley
to
overcome
the
shallow
ecosystem
(e.g.
YC
prep-­‐school)
21

22. Sample
Porxolio
Companies
22

23.
imcom
revolu@onary
furniture
buying
experience
using
depth
sensors
and
projec@on
mapping
www.imcom.com.tr
23

24. 24

25.
Surfio
fully
interac@ve
gesture/touch-­‐controlled
large
surfaces
www.surfio.com
25

26. hXp://bit.ly/1hIY8Y9
26

27. SigmaRD
Advanced
Computer
Vision
and
Natural
User
Interfaces
tools
www.sigmard.com
27

28. hXp://bit.ly/1eo8aWC
28

29. Emrah
Yalaz
emrahyalaz@stringventures.com
www.stringventures.com
Stanford
Engineering
European
Entrepreneurship
and
Innova@on
February
24,
2014
29