The last few months were filled with good news for our portfolio. First, Peak was acquired by Zynga for $1.8 billion, setting a new high watermark for Turkish tech exits. Then, yesterday, UiPath announced its $225m Series E round at a $10.2 billion valuation. However, the transaction announced by Vivense yesterday probably stirs more emotions with our team.
We had known Kemal Erol for a few years when he approached my partner Evren and me for financing a management buyout of Rocket Internet’s Westwing operations in Turkey. We were keen on the opportunity in home & furniture e-commerce in Turkey as we’d been watching how Wayfair developed into a sizable business focusing on a vertical that Amazon was not prioritizing. However, we felt a Westwing buyout would be messy so offered to back Kemal in a greenfield venture, and Vivense was born.
In hindsight, 2013 was a very tough year to start an e-commerce business in the Turkish market. While the business started with a lean marketplace model, customer acquisition was still quite costly in a market with well-funded competition. We felt certain that the business would require significant capital and kept looking for co-investors to join us in backing the company. We must have introduced Kemal to over 100 VCs from around the world, focusing on those with e-commerce and emerging markets experience and appetite. In the end, it was a tough combination of sector and geography and got no bites (except for a small investment by FJ Labs). We were fortunate to be joined by a few of our LPs and private investors to give the company barely enough growth capital to scale to its impressive size it now has, of course making all investors very happy along the way.
This is where Kemal and his team excelled. They built a lean machine to unleash the power of the large but fragmented manufacturer base of Turkish furniture, providing unparalleled choice for the furniture customer at a super competitive price. The company began growing very rapidly, serving millions of customers around the country. (My colleague Mehmed Atici shared our learnings regarding success in online furniture.)
Now the company has the European market in its sights. Of course, big plans require deep pockets, so we are excited to hand off the baton to Actera Group, a top Turkish private equity fund. They are partnering with Kemal to take the company to its next level and provide the necessary capital and support to get there. We think that the international potential is vast and that Vivense is exceptionally well-positioned to tackle it.
It’s also exciting to note that this is the first time a PE fund is acquiring a venture-backed company in our country. We are happy to see signs of completion of the capital curve for high-growth companies.
I’d like to thank Kemal, his co-founders, and the other team members who have been and continue to be part of this successful journey.
One thought on “A New Chapter for Vivense”
Congratulations! This is a huge success and a huge milestone. I am not sure the ” this is the first time a PE fund is acquiring a venture-backed company in our country” statement is accurate but it is a hugely important success story that should provide motivation and some validation to entrepreneurs, angels, and VC funds in Turkey. Proven value creation and success in each part of the financing chain is critical for belief and buy-in to the ecosystem and the last few months have been momentous.
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