Turkey’s late stage funding gap

Our ticket sizes reflect the fact that we’re a seed and early stage investor. Our past investments have ranged from $100K to $2.5M in any individual funding round.

When asked where there’s the biggest funding gap in the Turkish tech startup market, I always respond that it’s at the late stage. My definition of late stage investments for Turkey is round sizes north of $5M.

However, until recently, I didn’t have the data to back up my intuition. Given our positioning as a seed and early stage investor, my answer may have simply been interpreted as being self serving. I may have been looking to avoid competition at the stages where we invest while attracting $5M+ rounds of follow-on capital to our startups.

Thanks to Startups.watch, I now have data to back up my claim. Startups.watch’s 2015 Investment Activities report shares that 75 out of 80, or 93.75%, of the funding rounds for Turkish tech startups in 2015 were for rounds where less than $2.5M was raised.

Here’s another way to look at it. $36.2M, or 65% of the total $55.7M which was invested in Turkish startups last year, went to rounds less than $2.5M.

The fact that we need to define a late stage funding round as one where more than $2.5M is raised shows the extent of the problem. This cutoff should be much higher.

But even using this aggressive definition, late stage funding accounted for only 6.25% of the roundsĀ and 35% of the capital invested in Turkish startups last year. This data confirms the big gap for late stage funding in Turkey.