According to the “2025 Q1 Turkish Startup Ecosystem Report” published by Startups.watch, startup investments in Turkey showed a significant decline in the first quarter of 2025. A total of $58 million was invested across 49 investment rounds.
The report indicates that the first quarter of 2025 was the worst quarter in terms of number of investments since early 2023. In terms of investment amount, it was the second lowest level after the last quarter of 2023.
One of the biggest problems in the Turkish startup ecosystem, the difficulty of transitioning from seed stage to Series A and B investments, continued in the first quarter of 2025. The report notes that the average seed investment in Turkey is less than half of that in Europe, making it difficult for startups to reach Series A investments.
The gaming and fintech sectors led investment activity in the first quarter. Good Job Games in the gaming sector and Fimple in the fintech sector played significant roles in shaping investment trends. Although investments in AI startups appear modest, they are described as seeds planted for future growth.
No new corporate venture capital (CVC) funds were established or announced in the first quarter of 2025, keeping the total number unchanged at 92. Investments with corporate and CVC participation declined quarter-over-quarter to 27%.
According to the Turkish Capital Markets Board data, 26 Venture Capital Investment Funds (VCIF) were authorized in the first quarter of 2025, bringing the total to 481 (462 excluding those that have been closed). Investments with VCIF participation declined for five consecutive quarters, reaching 30% in the first quarter of 2025.
The number of successful crowdfunding campaigns also continued to decline, with only 4 successful campaigns completed in the first quarter of 2025.
The report states that since 2020, 430 VCIFs with a total fund size of $1.1 billion have been established. During the same period, 54 traditional VC funds targeted a combined fund size of $1.4 billion. VCIFs are considered micro funds with an average fund size of $2.5 million, while traditional VC funds have an average size of $26 million.
Among the most notable acquisitions in the first quarter of 2025 was Laboratoires Vivacy’s acquisition of Burgeon, a DCP portfolio company. This deal represents a “dragon exit” (a full fund-returning exit) for DCP and marks the first instance in Turkey where a deeptech fund has achieved a full fund-returning exit. Other significant acquisitions included Constructor Tech’s acquisition of Perculus, a Boğaziçi Ventures portfolio company, Cleversoft’s acquisition of Fineksus, and Ava Labs’ acquisition of EtraPay.
The report emphasizes that the investment decline might be due to the Ramadan feast at the end of March and investments made in the first quarter but not yet announced, noting that this situation will be seen more clearly in the next quarterly report.
