Gaming startups account for 57% of the total funding, the report revealed
Startups in Türkiye raised $274 million across 114 investment deals in the first nine months of 2026, with gaming companies accounting for 57% of the total, according to a report by startups.watch.
The Turkish startup ecosystem remains on track for a second consecutive annual decline in funding and deal volume unless large investment rounds materialize in the fourth quarter, the Turkish Startup Ecosystem Q3 2026 Report said.
Investment was heavily concentrated, with five startups accounting for 68% of the total funding. The remaining 109 deals had a median value of $250,000.
Gaming attracted $154.9 million across 17 deals, making it the largest sector by funding volume. The three biggest gaming rounds accounted for $125 million, or 81% of the sector’s total.(By the way I have a story here about the startup investments of the previous quarter)
Artificial intelligence ranked second by funding, attracting $90.8 million. However, the sector recorded 46 deals, the highest number among all industries, and 45 were seed-stage investments, indicating that much of Türkiye’s AI ecosystem remains at an early stage of development.
Fintech funding fell sharply to $16.6 million, compared with $220.4 million in 2025. The report attributed the downturn to intensified anti-money laundering enforcement, asset seizures and government takeovers targeting noncompliant payment providers, which dampened investor appetite and founder confidence.
HubX becomes Türkiye’s eighth unicorn
HubX became Türkiye’s eighth unicorn following its latest investment, according to the report. The AI-focused company also became the first unicorn to emerge from İzmir, outside the country’s main startup hub of Istanbul.
HubX accounted for 55% of AI investment volume during the first nine months of 2026. Excluding the company’s round, the median investment in AI startups was $250,000.
Other major recipients of funding included gaming companies Grand Games, which raised $70 million; TaleMonster Games, with $30 million; and Circle Games, with $25 million. Enterprise software company Fimple raised $10 million.
Turkish-founded startups abroad raise $1.3 billion
Turkish diaspora-founded startups raised $1.3 billion across 75 investment deals during the first nine months of 2026, significantly exceeding the funding secured by startups operating in Türkiye.
The diaspora funding total compares with $2.7 billion across 90 deals in 2025 and $1.6 billion across 106 deals in 2024.
The report also highlighted a growing international focus among Turkish venture capital investors, who are increasingly allocating capital to overseas markets.
Corporate investment and crowdfunding weaken
Corporate venture capital and corporate investors participated in 24% of startup deals in Türkiye during the first nine months of 2026, down from 34% in 2025.
The country’s corporate innovation ecosystem includes 85 active corporate venture capital funds and 11 corporate accelerator funds. The report said domestic corporate investors were increasingly pursuing opportunities abroad rather than deploying capital aggressively in the local market.
Equity crowdfunding also continued to contract. Fourteen startups raised a combined $3 million in the first nine months of 2026, down from $5 million across 22 deals in 2025.
The report cited high interest rates, currency volatility and limited opportunities for investors to exit earlier crowdfunding investments as possible reasons for the decline.
State-backed funds fill early-stage financing gap
Angel investor participation has declined in recent years, with fewer investors willing to finance startups before they generate revenue.
The state-backed TÜBİTAK BiGG program and accelerators have increasingly filled that gap. Of 42 pre-revenue startups that received investment in the first nine months of 2026, 29 were backed by the BiGG fund.
Meanwhile, 74 new venture capital investment funds received establishment approval during the period, bringing the total number of active funds to 615. These funds participated in nearly half of all startup investment deals.
Traditional venture capital fund formation remained subdued, although new capital allocations announced by the Industry and Technology Ministry and KOSGEB indicated a potential pipeline of new funds.
The report also pointed to a widening gap between Türkiye and Western European startup markets in advanced technologies. In the United Kingdom, Germany and France, AI was the leading investment sector, with median deal sizes ranging from $3 million to $5 million, compared with $250,000 in Türkiye.
The report noted that two British quantum technology startups had raised a combined $513 million, highlighting Türkiye’s limited presence in the emerging field.
Overall, the findings point to an ecosystem increasingly dependent on a small number of large investments, particularly in gaming, while AI attracts numerous early-stage deals. The report also highlights challenges in domestic venture capital deployment, angel investment and access to early-stage funding.
Image: ChatGPT
