In an effort to boost the Turkish tech ecosystem, venture capital firm Revo Capital plans to raise $100 million to invest in Turkish artificial intelligence (AI) start-ups. Here are some key points regarding this initiative:
- Revo’s new fund will make its first investment in gaming and energy sectors, explicitly targeting firms that develop AI and big data solutions.
- Despite current difficulties in fundraising, Revo anticipates directing 80% of the funds raised towards companies in its home country, while the remainder will be allotted to central and eastern European firms.
- Reiterating Revo’s broader investment strategy, Managing Director Cenk Bayrakdar stated the firm only invests in global businesses or companies destined for global expansion.
- An observed decline in European venture investments poses a significant challenge, with Turkish start-ups receiving $154 million in the first nine months of 2023, down from $1.26 billion in 2022.
- Even as Turkey’s digital infrastructure continues to evolve, cash still forms the dominant mode of payment, necessitating the integration of efficient digital payment systems for the ongoing digital transformation.
This fundraising initiative by Revo Capital is reflective of a growing trend in the investment landscape towards AI technologies and big data solutions, despite a generally challenging fundraising environment. This suggests continued recognition of the value and potential of these sectors in driving future tech innovations, economic growth, and digital transformation.
Turkish AI start-ups have experienced several successes in recent years, notably, the fast-delivery service provider Getir, which is backed by Revo Capital. This success lends credibility both to Revo’s strategy of supporting companies with global scope and to the potential of Turkey’s tech ecosystem in producing successful AI firms.
However, there are substantial challenges to overcome. Venture investments in Europe are down significantly, reflecting global uncertainties and difficulties in fundraising. Moreover, while half of Turkey’s 85 million consumers are younger than 30 years old, and smartphone penetration is in the range of 80%, most transactions are still done in cash. This highlights the need for further digital transformation in Turkey’s banking and payments space.
In conclusion, Revo Capital’s $100 million fundraising effort demonstrates strong faith in the potential of Turkish AI firms. Success in this venture could help invigorate Turkey’s AI landscape and might encourage further investment in this sector in the future.
