In this episode of Invest in Türkiye Talks, we dive into the early stages of venture capitalism, exploring Türkiye's venture capital landscape, which, though now burgeoning with potential, was once a barren field. We are joined by Ali Karabey, co-founder of Türkiye's first venture capital firm 212, to offer a fascinating glimpse into the challenges and triumphs of pioneering venture capital in a nascent ecosystem.
In 2011, Karabey and his partner Noman took a bold step in establishing 212, Türkiye's first venture capital firm. At a time when the concepts of venture capital and startups were virtually unknown in the country, their initiative marked a significant milestone. The name "212" reflects a blend of personal and professional journeys, derived from the telephone codes of Istanbul and New York—two cities that shaped their lives and careers.
Establishing 212 was not without its challenges. The investment landscape in Türkiye was underdeveloped, and convincing potential investors about the viability of venture capital was a daunting task. The first fund raised USD 30 million in 2011, primarily from family offices and individuals, as institutional investors were wary of entering uncharted territory. Educating investors about the startup ecosystem and the potential returns of venture capital investments required persistent effort and unwavering belief in their vision.
Being the first venture capital firm in Türkiye was a double-edged sword. While there was no competition, it also meant that Karabey and Noman often felt isolated. They constantly questioned whether they were visionaries or simply misguided. The initial years were particularly challenging, marked by a lack of peer support and an underdeveloped ecosystem. However, their persistence paid off as other funds began to emerge by 2013, gradually transforming the landscape.
212's investment philosophy extends beyond mere financial support. The firm emphasizes providing entrepreneurs with the necessary know-how, networking opportunities, and holistic support. Karabey highlights that investment is not just about money; it involves understanding human resources, psychology, and building deep relationships with entrepreneurs. This approach ensures that startups receive comprehensive support, enhancing their chances of success.
One of 212's standout initiatives is the "Growth Partner Program." This program embodies the principle of "Test Local, Go Global", and by this way helping companies succeed in the Turkish market before expanding globally. By focusing on local success, 212 ensures that startups are well-prepared for the challenges of international markets. This strategy has proven effective in nurturing robust companies capable of competing on a global scale.
Over the past decade, Türkiye's investment ecosystem has expanded significantly. Many other venture capital firms have emerged, and the sector now boasts a variety of actors. Despite the initial hurdles, 212 has played a pivotal role in shaping this ecosystem, providing a model for others to follow. The firm's success underscores the importance of perseverance, vision, and a supportive investment philosophy.
Karabey envisions a bright future for 212 and the broader Turkish startup ecosystem. The firm aims to continue supporting deserving entrepreneurs, potentially led by a new generation of leaders in the future. The focus remains on nurturing innovation, fostering growth, and contributing to the country's economic development.
The journey of 212 Venture Capital, as narrated by Ali Karabey, is a testament to the transformative power of vision and determination. From its inception as the first venture capital firm in Türkiye to its role in forming a vibrant investment ecosystem, 212's story is one of pioneering movement and enduring impact. As Türkiye's startup landscape continues to evolve, 212 stands as a beacon of support and inspiration for future entrepreneurs and investors.