Turkish startup ecosystem sees fewer deals in first quarter

ISTANBUL

Turkish startup ecosystem displayed a decline in deal volume in the first quarter of 2024 compared to the same quarter of last year, following the downtrend in global startup activity, according to a report by KPMG.

Without including acquisitions, the deal volume plummeted to $27.7 million, marking a drop from $45.2 million in the first quarter of 2023. Including the startup acquisitions, total deal volume amounted to $43.1 million with a total of 54 deals in the January-March period of 2024, said the report.

In line with the global environment, rising interest rates and decreased exit options have led to a slowdown in activity within the Turkish startup ecosystem, according to the report.

Seed stage investments constituted the largest share with 60 percent in total deal volume, while startup acquisitions accounted for a total share of 36 percent, said the report.

In terms of deal number, seed stage investments were the highest with 44 transactions, followed by startup acquisitions with eight transactions.

Similar to the final quarter of 2023, there occurred no late-stage investments as the number of early-stage investments declined to one.

Local investors were in the lead in both deal volume and count compared to foreign investors. In terms of deal volume, local investors represented 91 percent of the total deal volume across 54 deals, whereas the foreign investors constituted 9 percent with two deals, according to the report.

Fintech vertical constituted the highest number of deals with seven transactions, followed by gaming, marketplace and SaaS with six deals each.

In terms of total deal volume, Artificial Intelligence had the highest funding with $15.4 million, followed by $4.9 million in marketplace and $3.6 million in SaaS verticals.