Introducing VCs in Turkey: Yıldız Ventures

As a part of one of Turkey’s major holding companies, Yıldz Ventures focuses on food and retail start-ups

Founded and led by Yahya Ülker, Yıldz Ventures is the venture capital arm of Yıldız Holding.  The holding is, actually, Turkey’s prominent food producer and retailer. So Yıldız Ventures mainly concentrated on those startups as a part of investment strategy. On the other hand, other focus areas of Yıldız Ventures are  marketing and retail technologies, supply chain technologies and consumer experience. “We expect technology-focused ventures will gain momentum. The huge and fast change that we experience in the social and corporate life provided an efficient environment for innovative ideas. Therefore, we believe that investments will gain pace even more,” said Yahya Ülker.  I interviewed Ülker and here’s what he told me.

Can you tell us the story of Yıldız Ventures? What exactly do you do? Do you only use the resources of Yıldız Holding for your investments? Or are you open to other types of resources?

Today, consumers’ expectations are rapidly changing, and companies need to keep pace with this change rapidly. We cannot be a part of this change by only focusing on the business that we do. Several companies that have changed our habits have inspiring stories of entrepreneurship in their history. We founded Yıldız Ventures in 2019 in the light of this perspective. We aim to guide the development of innovative business ideas, to optimize our operations by adapting innovative ideas to our works in our areas of operation, and simultaneously to support the entrepreneurship ecosystem.

At Yıldız Ventures, we have three main areas of operation, namely venture accelerator program, incubation, and financial investment. First of all, we evaluate the applications by ventures and launch a six-week acceleration module with the ones we consider to be fit strategically. At this stage, the executives at Yıldız Holding companies act as mentors for ventures as well. We invest in ventures that succeed at the end of these six weeks and become their customer. In addition, we provide the ventures an opportunity for collaboration with enterprises starting from the early stages, with the reference of Yıldız Ventures. This enables them to test their products in the pilot scale. Moreover, they receive feedback concerning product-market match. Ventures benefit not only from financial support from Yıldız Ventures and the opportunity of becoming the first customer of Yıldız Holding companies, but also from all other opportunities provided by the Holding, such as corporate knowledge and experience, market knowledge and technological facilities.

What are your main criteria when you decide to invest in a venture?

At the incubation side, we prioritize ideas or early-stage ventures that may add strategic value to our business. At the financial investment side, our structure is open to ventures from every industry. We evaluate the ventures according to criteria such as team, product, business model, commercialization strategy, and target markets, and make the investment decision accordingly.

What kind of start-ups are within your range? And how much did you invest so far?

We focus on ventures in food and retail industries. Within the scope of our acceleration program, we plan to invest in at least three start-ups in food next year. We prioritize the ventures which will contribute to us in these industries.

istegelsin, an online supermarket, is a prominent example supported by Yıldız Ventures. Thanks to the investment support and know-how by Yıldız Ventures, istegelsin is now an innovative venture that steers the market in online supermarket shopping. The company has even started to provide services in Bodrum as of May 2020, in addition to İstanbul, Ankara and Kocaeli.

Likewise, we have invested in Eurofresh – a food venture that offers washed and chopped fruits and vegetables that are very practical to use. It continues to strengthen its market position with its multi-channel strategy. The other six start-ups that we have made investments in the fields of marketing and retail technologies, supply chain technologies and consumer experience are also taking firm steps towards growth.

I know you organized Yıldız Ventures Accelerator Program in 2020. Which startups have been selected? And how much did you invest to those startups?

Within the scope of our accelerator program we support six start-ups. VibeVision, TradeMonday and DeepNeep were chosen for the first Yıldız Ventures Accelerator Program. The start-ups chosen for the second Accelerator Program are Arkim, Paragon Pure and Nom. At the first stage, we provided ventures with a financial support up to 75 thousand dollars. In addition to these, we continue to support the ventures in our incubation center. Amount of our investment varies by ventures and different factors such as their level of maturity.

Do you think that the start-ups in Turkey have started to attract more attention globally after Zynga acquired Peak Games in Turkey for $1.8 billion?

The ecosystem of entrepreneurship in our country is rapidly developing. A constantly-growing number of angel investors abroad invests in new ideas. The number of investment funds or venture capital companies also continue to increase. We see that enterprises are also establishing their own funds one after another. Simultaneously, there is a significant increase in the number of start-ups as well. We know that Turkey’s entrepreneurship ecosystem is open to fresh and new ideas. We are sure that this potential will attract more attention all around the world in the following process.

What are the pros and cons of the start-ups of the Turkish as compared to their global peers?

Turkey has a great potential in its entrepreneurship ecosystem. “The new normal” that entered into our lives with the pandemic will change the rules of the game for entrepreneurs. As consumers spend more time at home, attach more importance to themselves and their budget, use online shopping, and as more efficient ways of working are adopted, new business models that meet these needs will shine. Whereas, initiatives that cannot adapt their business models to such changes will continue to decline. It is vital for Turkish entrepreneurs to consider this fact and to build their plans on firm grounds.

On a global scale, what kind of start-ups will shine, especially during COVID-19 pandemic?

With the pandemic, e-commerce and food industries started to work in greater integration. We expect an increase in new collaborations and ventures in this field. We are on the verge of a period in which venture capitals start to focus on new business areas and accelerate investments. We expect technology-focused ventures will gain momentum. The huge and fast change that we experience in the social and corporate life provided an efficient environment for innovative ideas. Therefore, we believe that investments will gain pace even more.

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