New VC Map Covers CEE, Turkey, and Central Asia

The new mapping tool arrives as the Central and Eastern European (CEE) VC landscape shows signs of a slowdown. After a period of resilience, the total financing value in CEE dropped significantly from nearly €2 billion in Q2 2022 to €560 million in Q2 2023, a figure that held steady into Q3 2023. This decline is largely attributed to the macroeconomic environment and reduced participation from foreign investors. Despite a global downturn in venture capital, the Turkish startup ecosystem demonstrated notable resilience and growth in 2024, with total deal volume, including acquisitions, surging to a record $2.6 billion from $497 million in 2023. The number of deals also increased to 331 from 297 in the previous year. Seed-stage investments were particularly dominant, accounting for 280 of these deals. Artificial intelligence has become a leading sector for investment in Turkey, securing $715.8 million in 2024. This was largely driven by a $500 million funding round for the AI-native customer engagement platform, Insider. The Turkish government is also bolstering the field with its National AI Strategy (2021-2025) and initiatives like "Terminal Istanbul," which aims to host over 2,000 startups. In the Turkish deeptech sector, there is a recognized gap between academic research and commercialization. While universities produce internationally recognized publications, the conversion of this research into patented, fundable startups remains a challenge. Initiatives like the De-TECH competition, a collaboration between Istanbul Technical University and other European universities, are working to accelerate the market entry of deep tech innovations from university environments. Turkey's climatetech landscape is gaining momentum, driven by the country's 2053 net-zero target and the need for industrial decarbonization. The Turkey Industrial Decarbonization Investment Platform (TIDIP), a joint initiative with the EBRD and World Bank Group, aims to deploy €5 billion in investments by 2030 to reduce emissions in sectors like steel, aluminum, cement, and fertilizer. Key investment areas include energy efficiency, electrification, and green hydrogen. The macroeconomic environment in Turkey presents both challenges and opportunities for the startup ecosystem. High inflation and currency fluctuations are significant factors influencing investment decisions. However, some firms have responded to this economic stress by improving operational efficiency, and government policies are in place to attract foreign direct investment. For Turkish founders, the path to building a successful company often involves looking for global opportunities. Angel investment groups like Galata Business Angels (GBA) focus on startups with high international growth potential, providing both capital and strategic guidance. The Turkish startup ecosystem has produced several unicorns, including Peak Games and Getir, demonstrating the potential for local startups to achieve global scale. Venture capital funding in Central Asia is also on an upward trend, reaching $95 million in 2024, a 7% increase from the previous year. Kazakhstan leads the region, accounting for 74% of the investments. While early-stage funding is prevalent, there is a recognized gap in later-stage funding, leading startups to often seek international investors for larger rounds.