Turkey joins ‘Super League’ as gaming startups shine in record Q1
As capital continues to pour in at an unprecedented pace, the Turkish startup ecosystem has left behind its best first quarter to date.
The momentum promoted Turkey to the “Super League” in Europe when it comes to investments, while Istanbul spearheaded the way with the gaming industry.
The Turkish startups secured more than $1.27 billion in 49 investment rounds from January through March, the data from the industry monitor startups.watch showed.
It has approached the amount of the whole of 2021, when over $1.58 billion was invested through a total of 321 tours.
The January-March figure marks the best first quarter ever for the ecosystem, and would still be the highest to date ($505 million) if the investment that the rapid delivery pioneer Getir has received is excluded.
Most of the capital, namely 90% or over $1.14 billion, poured into three startups alone. Getir secured $786 million, followed by Dream Games with $255 million and Insider with $121 million, the startups.watch data showed.
Turkey has thus on a quarterly basis managed to find itself in the league of billion-dollar countries, named the “Super League,” consisting of nations such as the United Kingdom, France and Germany.
Istanbul champion
Turkey has been a champion in gaming investments, said startups.watch founder Serkan Ünsal.
“Considering the investments made in gaming initiatives in the first quarter of 2022, Turkey became the country attracting the most investments in Europe and the Middle East region, while Istanbul became the city drawing the largest amount of investments,” Ünsal told the event to announce the first-quarter results.
The Turkish metropolis thus left behind prominent cities such as London, Oslo and Helsinki, he added.
“Istanbul, which also ranks first in terms of the number of game studios, has clinched its breakthrough in gaming,” Ünsal stressed.
“Gaming startups set a record as the total amount of investments, and in the first quarter, seven startups received investments of $326 million.”
Ünsal stressed the performance of Spyke Games, which raised a record $55 million in a seed round of funding. It marks the largest seed round to date for a startup out of Turkey.
He also pointed to another casual gaming startup, Dream Games, which received $255 million that helped it join Turkey’s unicorn ventures.
This “demonstrates the richness Turkey has when it comes to gaming startups,” the number of which, moreover, continues to grow, Ünsal said.
He also linked the success to the collective track record as co-founders and many employees gained experience at Peak Games, Turkey’s first unicorn that was acquired by U.S giant Zynga for around $1.8 billion in 2020.
“The acquisition of 80% of the gaming enterprise Alictus for $100 million was the largest acquisition of the first quarter of 2022,” said Ünsal.
“So, gaming startups continued to shine in the first quarter.”
Corporate venture capital
According to the startups.watch data, corporate venture capital (CVC) funds joined one out of every three investment deals in the first three months of the year.
Among these, Esas Holding, Türk Telekom, Sabancı Holding and Eczacıbaşı have come to the fore with their recent investments.
When it comes to deal count, cloud-based software startups, software as a service (SaaS) and financial technology ventures were the ones drawing the greatest interest.
Among others, gaming, artificial intelligence (AI) and marketplace ventures were also at the forefront.
Foreign investors joined one out of every three investment deals, the data showed.
On the other hand, some 44 funds with a size of $645 million were established over the last three years.
Women make an impact
Female entrepreneurs were included in 35% of the investment deals from January through March.
Many of the billion-dollar startups in Turkey, including Trendyol, Hepsiburada and Insider, are led by female entrepreneurs.
In addition, women are prominent in impact-making initiatives engaged in industries such as education, health and artificial intelligence.
Hande Çilingir has become an inspiration for the software initiatives as a co-founder and CEO of Insider, Turkey’s first billion-dollar software venture.
Different metrics
Esas Holding, which has attracted attention in the venture ecosystem with its investment in Getir, is among the institutions that invest in startups with a global growth goal that need double-digit investment.
“Different metrics apply here. We are used to different parameters such as profitability in the areas we have entered before and to long-term investment negotiations. The situation is completely different here,” said Esas Holding CEO, Çağtay Özdoğru.