Turkey’s Bright Internet Future


Last week Sina Afra had a good post on why Turkey has turned into a hot internet market, as a follow on to Robin Wauters's post on Trendyol's new round in Techcrunch.

All of this attention is obviously triggered by the tremendous year Turkish internet industry has had.  We have enjoyed a landmark period where we've seen two large exits in the $200m range to global strategic buyrs (GittiGidiyor-eBay and Markafoni-Naspers), and numerous investment rounds from top VCs like Tiger Global, Kleiner Perkins, Intel Capital, ePlanetEarlybird and Hummingbird.

The interest is certainly not limited to the names mentioned above.  I have probably had more conversations with global VCs about Turkey in the last 6 months than the last 6 years combined.

Sina does a good job going through some of the reasons why Turkey is so hot.  He focuses on:

  • Large internet population: estimated at 35m, 5th in Europe
  • High growth e-commerce penetration, with huge upside remaining
  • High engagement, evidenced by the huge Turkish population on Facebook
  • Favorable demographics – 70% of online population <34 years of age
  • Strong payments and logistics infrastructure, critical for e-commerce

I fully agree with all of Sina's points, and I won't spend more time on these.  Turkey's getting all kinds of investor attention in every asset class and I think the country's merits on the macro level are evident to most.

However, I do want to point out some additional key actors who have contributed to the growth of the internet sector in Turkey.

First is talent.  There is an increasing number of young, smart, well-educated entrepreneurs launching technology ventures in Turkey.  For the best and the brightest,with plenty options in traditional careers, launching or joining a startup is much more of a viable career path today.  SocialWire (aka Iletken), Peak Games, Gezlong, and KonutKredisi.com.tr are a few examples that quickly come to mind.

Second is the growing diaspora of Turkish entrepreneurs, investors and professionals around the world, interested in and supporting the Turkish internet sector.  They understand the dynamics and the promise of theTurkish market and their influence, experiences and conections have been helpful to many Turkish ventures.

Third is the Turkish interent user. When you observe the meteoric growth of Turkish ventures like Grupanya, Markafoni, Trendyol, YemekSepeti and Nokta, you realize that the Turkish internet user is hungry for high-quality offerings, both in media and services. If a venture is able to offer first rate service, the uptake is extremely fast.  Sometimes the recipients of this attention are global players, but local ventures almost always get a first shot at attention.

I continue to believe we are in the early chapters of the Turkish internet story.  I look forward to helping build the next generation of Turkish internet winners.

UPDATE: With this post, I realized I'd missed Ari's post on the same topic last week.


Clay Shirky does not write very frequently, but when he does, it's often worth paying attention to.  His latest post is no exception.

Sriky is pointing out the changes in the media business and the inability of old media to comprehend them.  He summarizes his point in a fun way:

To pick a couple of examples more or less at random, last year Barry
Diller of IAC said, of content available on the web, “It is not free,
and is not going to be,” Steve Brill of Journalism Online said that
users “just need to get back into the habit of doing so [paying for
content] online”, and Rupert Murdoch of News Corp said “Web users will
have to pay for what they watch and use.”

Diller, Brill, and Murdoch seem be stating a simple fact—we will
have to pay them—but this fact is not in fact a fact. Instead, it is a
choice, one its proponents often decline to spell out in full, because,
spelled out in full, it would read something like this:

“Web users will have to pay for what they watch and use, or else we
will have to stop making content in the costly and complex way we have
grown accustomed to making it. And we don’t know how to do that.”

What Clay Shirky is identifying for the media industry, can be attributed to the Turkish business environment in the broadest sense.  It even includes businesses who were born to the connected economy.

My investments are built on one simple thesis:  That Turkey has lagged
comparable markets in the transition of economic activity to the
connected platforms.  I think there's enormous profit potential in this
situation, if the right exposure is attained.  And part of it comes
from the behavior of incumbents in the Turkish economy. I will be thinking more about specific examples and try to document them in this blog.

NuBridge Venture Summit – A Turkish Internet Milestone

Newbridge I blogged about the NuBridge Venture Summit (and the preceding NuBridge Angel Summit, which took place last week and was extremely successful) last week.  However, as we are about to kick off this event, I believe it's such an important event for the Turkish internet industry, that I wanted to blog about it again, this time in a dedicated post.

PamirgelenbeThe organizer of the event, Pamir Gelenbe, is London-based VC with Turkish roots.  He approached me with the idea that a TechTour-style mini-conference would make sense for the Turkish market, while we collaborated on the European Tech Tour's Web & Mobility Summit back in November.  I thought it was a great idea and said that we'd support the event.

 In the following months Pamir worked hard at putting together an event that now has such a spectacular line up of participants that my expectations are far exceeded.

The event's format is primarily short presentations by leading Turkish internet companies, interspersed with panel discussions by entrepreneurs and venture capitalists.  There will be networking opportunities that will allow participants to connect and hopefully, a few funding deals will emerge from the event.

As with all events of this type, the critical success factor is who the attendees are.  On that front, Pamir has done an excellent job and has lined up the following participants, each of whom play an important role in global venture capital:

  • 3TS
  • Accel
  • Acton Capital
  • BakerMcKenzie
  • Big Bang Ventures
  • Endeavour Vision
  • General Atlantic
  • Golden Horn Ventures
  • Holtzbrinck
  • Index Ventures
  • Sardis Capital
  • TA Asociates
  • Tiger Global
  • Tomorrow Focus AG
  • Ventech
  • Wellington Partners

For the event to accomplish its mission, an investor list of this caliber would have to be met with a local internet company line-up of equal strength.  On that end, the event boasts a who's who of Turkish internet sector:

  • Airties
  • befunky
  • Bilyoner.com
  • Cimri.com
  • Digitouch
  • Dogan Online
  • Doktorsitesi
  • Ebi
  • e-kolay
  • enuygun
  • Euromessage
  • Gamesultan
  • Gelirortaklari
  • grou.ps
  • Hepsiburada.com
  • Hitay
  • limango
  • Magnet
  • Mynet
  • Nokta
  • Sanalika
  • Sporx
  • Tasit
  • Vatan Bilgisayar
  • Yemeksepeti.com
  • Yogurt

I am very confident that this event will be looked upon as a unique milestone in the development of the Turkish internet industry.  We are very proud to have our portfolio companies (befunky, grou.ps and Yogurt for GHV and YemekSepeti.com for me) presenting, and to have had the opportunity to support this event as a sponsor.

Ross Dawson: Turkey’s a Hot Internet Market

My friend Ross Dawson was the keynote speaker at the IPZ2009 (interactive marketing summit) last week here in Istanbul.  It was great catching up with him and listening to his insightful social media presentation.

To follow up, he has just posted his "Five reasons why Turkey is one of the hottest Internet markets in the world".  Since I have made it my business to invest in the Turkish internet industry, I obviously agree with all of his points.

One interesting point Ross has picked out is the language skills.  He found English skills outside of the professional sector pretty weak.  However, Turks grew to be the third largest nationality on Facebook prior to the introduction of Facebook in Turkish.  Which makes me think there is a level of language skills, while not sufficient to communicate conversationally, allows one to utilize social media pretty effectively.

Ross's post would be an excellent primer on anyone interested in the Turkish internet market.

Facebook and the Turkish Developer Community


As of today, there are 11,818,880 users on Facebook who live in Turkey and are over the age of 18.  This figure is according to the self-service ad module on Facebook.  I certainly concede there are many duplicate accounts in this figure, but I think it would be safe to assume that there are over 8m unique Turkish users of Facebook.  In fact, comScore estimates 5.5m average daily visitors for the month of August 2009.

This is enormous traffic.  To put this in perspective, MSN Turkey estimated the Turkish internet user population at 12-14m in August 2006.  As far as the Turkish market is concerned, Facebook is now nearly as big as the entire internet was just three years ago.

As an venture capital investor focused on the Turkish market, this makes me extremely excited.  It should surprise no one that almost everyday, I receive a business plan for a Facebook app-driven venture that plans to capitalize on the strong engagement Facebook enjoys in Turkey.

Or should it?

The previous paragraph is a lie.  I am amazed at the way Turkish internet developers are ignoring this enormous potential.  When you look at the most popular apps on Facebook, there is not a single Turkish app.  The same is true for app developers.

Two weeks ago, a Turkish app named Senin İçin jumped to the top of fastest growing apps list, with an MAU of 681K.  This week, they are nowhere to be seen, having only grown to 815K.  Very notable, though, is the presence of another app, also named Senin İçin! (BTW; I thought FB would filter out apps with the same/similar names.)

I think Facebook represents a phenomenal opportunity for Turkish developers.  Facebook's growth in Turkey has proven that viral growth works here, with the right incentives and hooks.  Zynga is showing everyone that you can attain revenues thru FB apps.  I would bet that at least 5% of Zynga's reported $100m+ revenues are coming from Turkey.  How many Turkish internet companies can boast of similar revenue traction?

I will be keenly watching to see if the Turkish developer community wakes up to this opportunity.

Image credit:  Taylanbey