Turkish VC Faces 'Growth Capital Gap'
A structural funding deficit exists for Turkish startups between the Series A and late stages, according to İhsan Elgin, a managing partner at Oleka Capital. In a recent podcast, Elgin warned that this gap threatens to stifle the growth of scalable tech companies, as international investors have retreated and local funds remain small. He noted this may force the best founders to sell their companies early or move abroad to secure funding.
- The growth-stage funding challenge is pronounced for startups with valuations over $50 million, which face significant difficulties in securing investment from Turkish VCs, often compelling them to seek capital abroad or slow their growth. - While the total number of VC deals in Turkey has shown resilience, the participation of foreign investors has declined, reaching a five-year low in 2024. In 2023, only 31 out of 325 investment deals included foreign investors. - In response to the funding gap, the Turkish government has introduced several initiatives, including a $250 million "fund of funds" to provide matching capital for venture firms and the Turcorn 100 Program, which offers specific support to scale-ups targeting global markets. - The Turkish startup ecosystem saw a significant drop in total investment value in 2023, influenced by high inflation and global economic uncertainties that particularly affected investment segments between $10 million and $100 million. However, total deal volume surged from $497 million in 2023 to a record $2.6 billion in 2024. - Despite the late-stage gap, the early-stage ecosystem is active; Istanbul was ranked as a top "strong starter" ecosystem due to high activity in seed and Series A deals. From 2020 to 2023, the seed-stage deal count
