Growth predicted despite turmoil
Government has 100-unicorn target
AI sector activity picks up
Turkey’s startups bucked global trends in 2024, posting significant increases in the number of transactions and volumes.
Despite the current political turmoil, further growth is forecast for the year ahead.
There were 331 transactions recorded last year, compared with 297 in 2023, according to a recent report by financial services firm KPMG. Value increased by more than 500 percent, up from $497 million in 2023 to $2.6 billion in 2024.
Worldwide startup transaction numbers dipped 7 percent last year; however, the fall was offset by transaction values rising 7 percent.
A number of factors contributed to the performance in 2024, says Sinem Cantürk, partner and head of fintech and digital finance at KPMG Türkiye.
Cantürk says that Turkey’s fintech ecosystem, regulations, young population and the government’s commitment to the sector were the biggest factors behind the increased volume.
Headlining Turkish transactions was the acquisition of a 65 percent stake in Hepsiburada, an online sales platform, by Kazakhstan-based digital services operator Kaspi.kz for $1.1 billion. The fintech, artificial intelligence (AI), software as a service and gaming sectors were highly active in terms of transaction numbers, the report said.
The expansion of activity is in line with state goals to support startups.
Turkey has been hit by a wave of demonstrations, the biggest in a decade, following the arrest of the mayor of Istanbul, who is also a leading opposition figure, on corruption charges.
The turmoil has taken a severe toll on the lira and stock market which in March had its worst week since the global financial crisis of 2008.
The Turkish government has set a target of 100 unicorns – startups with a value of $1 billion each – along with at least 100,000 tech enterprises, by 2030.
To help achieve this goal, the government has committed to establishing offices in each of the country’s 81 provinces to offer support services to startups, with the first agency opening in Ankara in mid-March.
The scope of startup activity has broadened, according to Gökhan Say, founder and CEO of CyBridge Capital, an early-stage investment, advisory and exit strategy company that works with young companies in cybersecurity, risk and compliance.
Along with an increase in companies specialising in security, he says, there are stronger moves into AI.
“We are now starting to see positive developments in the AI field. I was getting worried over us falling behind on AI but now I am starting to see good AI applications being developed one after the other,” Say says.
This trend should feed into strong results for this year, according to Cantürk.
Though transaction value was dominated by a few large acquisitions, the increased pace of global fintech investment in the last months of 2024, along with domestic growth, should carry on into this year, as long as the factors which drove expansion last year do not change, she says.
“I believe that this increase and positive outlook will continue this year. We can say that we expect a successful 2025 in Turkey’s fintech investments,” Cantürk says.
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