With recent events of an attempted coup filling the news cycle relating to Turkey, we thought it opportune to shine a light on the largely overlooked economic engine that Istanbul represents.
Istanbul – an Emerging Global Tech Hub
Straddling the Bosphorus Strait with Europe on one side, Western Asia on the other, and North Africa to the South, Istanbul’s unique location and perspective as the gateway across three continents represent just two of the many reasons why Wesley Clover began helping local entrepreneurs in this international city connect with investors to boost their business.
Home to a population of nearly 30 million people in the greater Istanbul area, Istanbul is a historical, cultural, and economic global hub, and emerging tech hub for the region. We expect regional growth to accelerate rapidly in the next few years as local startups mature, and the benefits of the world’s largest airport opening increase the value proposition of this gateway city as a global hub.
Our organization’s involvement has been channeled through a strategic partnership between our Wesley Clover team, Netaş, and TRPE Capital, forming the Netas Wesley Clover Tech Fund. The fund is focused on investment opportunities in technology oriented startups in Turkey.
The Startup Scene in Turkey
Istanbul’s connection to both East and West has made Turkey an important emerging market for businesses from around the world. The startup ecosystem in Istanbul, and Turkey overall, has developed steadily, and accelerated considerably in recent years. Industrial development around energy and infrastructure have become two of the most important economic sectors contributing to Turkey’s economic growth. Traditional agriculture remains among the most important economic drivers in Turkey, with almost a quarter of the population working in the sector and nearly half of the country’s land used for agriculture. This sectoral strength is also a source for IT innovation.
Low Living Costs & Diversity
A lower cost of living compared to other regions combined with a strong education system developing a well-educated youth has created a societal and economic foundation that allows for diversity. An abnormally high concentration of women in tech for the region has also helped develop diversity in Turkey’s thriving ecosystem.
High Mobile Usage
With half of the country’s population under the age of 30 and a 90% mobile penetration rate, the industry surrounding mobile technologies is huge in Turkey. Accordingly, it is no surprise that Turkey is home to a talented, tech-savvy workforce. It also has one of the most active consumer bases in the world for mobile shopping, mobile banking, QR code scanning, and mobile wallet technology usage. Many of the country’s fastest growing companies focus on mobile for this reason.
Correspondingly, Turkey is also a prime market for big data and a better understanding of user devices and behaviour. Digital advertising grew by 20% from 2014 to 2015, which is why companies like ReklamStore show significant growth rates in the mobile ad space. Online retail is another growing sector, expanding seven times faster than in-store retail since 2007.
Going hand-in-hand with mobile, Social media adoption rates is accordingly popular with the country’s young population. By making use of social media and chat apps, urban Turks in particular stay up to date with news events. This has caused friction for the government which has tried to control access to social media, blocking Twitter, YouTube, and Facebook seven times in the last ten years. The contentious relationship between government control of Social Media its importance and popularity in Turkey has made social media a hotly debated topic.
Support Networks and Initiatives
There are a number of local venture capital and angel investor organizations, with more and more international ones also taking notice and getting involved in Turkey’s emerging tech world. National organizations like TUBITAK, The Scientific and Technological Research Council of Turkey, and the Technology Development Foundation of Turkey play active roles in developing the country’s tech sector. As a EUREKA member, Turkey works with the global intergovernmental network to host programmes like EUROSTARS to further research, development, and innovation on an international scale through funding, support, and access to resources. As well, the existence of numerous technoparks across the country, with six in Ankara alone, provides businesses with direct access to innovative technology clusters, tax exemption benefits, and reduced operating costs.
Our Partners in Istanbul
The bridge (literally) between East and West allows Istanbul to be a prominent economic centre. With a foot planted in the business cultures of both Europe and the Middle East/Asia, the city has an unique perspective as to how to help companies thrive across cultures and regions.
The Wesley Clover team, Netaş, and TRPE Capital, play an active role in entrepreneurship and investment in Turkey. Based in Istanbul, our contingent helps manage the Netas Wesley Clover Tech Fund, investing in ideas, seed, and early-stage companies with high growth potential. The fund focuses on the ICT sector and especially on business to business solutions.
Fund initiatives reflect both the Turkish market and global opportunities we see for innovation in offerings for B2B and B2C. Some of the companies we currently work with include Pisano, which is focused on mobile visitor satisfaction and engagement solutions; Twentify, a crowdsourcing application that enables users to claim tasks and benefit from solving them; IVEN, a cloud service for monitoring IoT enabled devices; Deriva, a wireless analytics platform that focuses on customer insight and analysis; CreatorDen which is focused on creating an influencer marketing marketplace, and; Startsub, an online platform for subscription businesses. These companies reflect the innovation and cutting-edge blend of technological know-how common to the local Turkish market.
Using a proven startup model, with the guidance of a global team of seasoned experts, we recruit talented, passionate, young entrepreneurs and grads from Turkey’s best universities. By being aware of market problems and gaps, we are able to identify high market value products and support entrepreneurs in the creation of successful solutions.
“The most significant issue with turning a startup into a success story is commercializing products. Our startups gain access to strong sales and distribution channels for their potential products through our strategic partners at their earliest phase.”
Our partners’ backgrounds allow us to tap into modern technologies in the communications, cloud computing, networking, defense, optical and carrier Ethernet, GSM-R, IT integration services, strategic outsourcing, and tailored software development solutions sectors. By working with innovative and determined people, we are able to support Turkey’s growing tech sector and its emergence as a global tech hub.