The year 2023 started under the shadow of economic
troubles and political uncertainties around the world. However, it was full of
hopeful expectations. However, with the devastating earthquake in the second
month of the year, a period of deep mourning was experienced throughout the
country. In these difficult times, people from all over Türkiye hugged each
other tightly and pulled together. Although a temporary tax deduction was
introduced for companies that raised capital, the retroactive tax debt of startups
that received investments in 2022 drew reaction from ecosystem stakeholders.
The general elections held after the earthquake with
high participation shaped the political landscape in the country. There was a
comprehensive change in the economic administration. In the following months of
the year, the effects of the earthquake and the elections continued to be felt
in all areas.
By autumn, Türkiye celebrated the 100th anniversary of
the republic with enthusiasm as it tried to leave behind the months of sadness
and uncertainty. However, political and economic uncertainties around the world
led to massive layoffs, which were also felt in the technology sector.
While Türkiye charted its own course against global
fluctuations, the resilience shown by local entrepreneurs and investors was a
clear sign that the ecosystem is rising on solid ground. As we approach the end
of the year, the entrepreneurship ecosystem has left behind another dynamic
year, defying all obstacles. Although 2023 did not surpass the billion-dollar
mark in venture investments, it followed in the footsteps of previous years in
many respects and resulted in similar successes.
In 2023, tech startups received $913.1 million in
investments. The median value of investments was $300 thousand.
On a sectoral basis, Transport and Logistics received 516.2 million, Artificial Intelligence and Machine Learning 126.8 million, Marketing and Sales 118.7 million USD.
In addition, 41 Artificial Intelligence and Machine Learning, 39 Gaming, 34 Sustainability and Environment start-ups received investments.
Türkiye has
left behind a year full of challenges and the volume of venture investments has
significantly decreased. In 2023, there were 353 investment transactions,
totalling $913 million. This is a marked decline from the previous two years,
when investment volumes crossed the billion-dollar mark. While companies such
as Insider and Getir received reinvestments, all other investments remained
below $20 million.
While the
decline in investment volume was noticeable, the decrease in the number of
transactions was more limited. The number of transactions decreased from 387 in
2022 to 353 in 2023. Although realised investments decreased by more than 10%
compared to the previous two years, investment levels remained quite high
compared to the pre-pandemic period. According to this data, although there was
a contraction in the total investment value in 2023, the market managed to
maintain its dynamism thanks to the relative resistance shown by the number of
transactions.
Excluding
mega investments ($100M+), the total amount halved
Türkiye's
startup ecosystem is characterised by a skewed total investment figure due to
the low number of startups receiving large-scale investments. When large
investments are excluded, Türkiye's true level of investment attraction can be
seen more clearly. In 2023, investment amounts almost halved. When we go into
detail, we see that there is stability in the number of investments in the
range of 1-10 million dollars. Startups in this segment can still attract
investor interest. Although there is a slowdown in the Turkish startup
ecosystem in general, it can maintain its vitality in certain investment ranges.
2022 stood
out as a period of tightening monetary policies and increasing
political-military tensions after the pandemic. This created a general
atmosphere of pessimism towards 2023. The effects of economic policies, which
tended to improve especially in the first half of the year, started to slowly
emerge in the second half of the year. High inflation and uncertainties in the
global economy affected venture investments, causing a significant decrease
especially in the $10-100 million segment.
Türkiye's
economy was also affected by this trend; in 2023, only four investments were
above $10 million, two of which were made by unicorns such as Insider and
Getir. Other large investments were made by local startups focusing on the
European and US markets.
2023
started with challenging conditions for Türkiye but showed continued dynamism
in terms of venture investments. Although the total amount of investments
decreased, there were increases in certain investment types and ranges.
According to the analyses, 2023 seems to have similar characteristics with 2021.
Especially with the interest of domestic investors, 2023 was a successful year,
not the brightest year for the ecosystem, but a year that demonstrated the
adaptability and determination of investors and entrepreneurs.
Resource:startupcentrum.com/2023-Turkish-Startup-Ecosystem-Funding-Report
