Macro Headwinds Shape Turkish Startup Strategy
Turkish startups continue to navigate a challenging macroeconomic environment characterized by currency volatility and high interest rates. These factors are forcing founders to prioritize global strategies, hard-currency revenue, and international capital from day one. While higher local rates may slow domestic VC deployment, some international funds reportedly view Turkish startups as undervalued compared to European peers.
- The Turkish Central Bank has signaled a measured approach to interest rate cuts in 2026, with the benchmark policy rate at 37% as of January. The bank raised its year-end inflation forecast for 2026 to a range of 15-21%, acknowledging heightened risks. - In 2024, investment volume in Turkish startups surged by 423% to $2.6 billion, with 331 total transactions. The largest transaction was the acquisition of over 65% of e-commerce giant Hepsiburada by Kazakhstan-based Kaspi.kz for $1.1 billion. - AI startups led in funding in 2024, raising $715.8 million, with the AI-native customer engagement platform Insider securing the largest round at $500 million. The fintech sector saw the highest number of deals at 31, followed by biotechnology with 28 and AI with 25. - The Turkish government has actively encouraged entrepreneurship through various programs, including the "Turcorn 100 Program" which supports scale-ups in their global expansion. The country aims to have 100,000 tech startups by 2030. - To attract foreign talent and startups, Turkey introduced the "Türkiye Tech Visa" in September 2024, a specialized program for professionals with expertise in technology and innovative business models. - The gaming sector in Turkey has seen significant growth, with Istanbul becoming the second-largest gaming hub in terms of studio density after London. In 2023, 33 early-stage gaming startups in Turkey secured funding, with an average round size of $1.9 million. - International institutions like the International Finance Corporation (IFC) and the European Bank for Reconstruction and Development (EBRD) have been cornerstone investors in Turkish venture capital funds, signaling growing confidence in the ecosystem. - The Scientific and Technological Research Council of Turkey (Tubitak) provides grants for R&D and has a "Venture Capital Funding Program" that pledges to invest up to 20% in participating venture capital funds.
