Boom in investments in Turkish gaming startups

The first success stories of Turkish game companies Peak and Rollic in 2020 encouraged entrepreneurs and raised investor confidence.

Istanbul-based Peak became Turkey’s first unicorn – a term for startups that surpass the billion dollar mark – and hyper-casual game maker Rollic has left a mark on the ecosystem with its early success at just 18 months, prompting investors to take a closer look at gaming startups in Turkey.

Additionally, this trend has sparked the birth of gaming-focused mutual funds like WePlay Ventures.

Investors, startups and talent scouts gathered this week at the event jointly organized by startups monitor startups.watch and Google.

According to startups.watch figures announced at the event, 30 startups received an investment of $ 223.8 million in the first seven months of this year.

Founded by Peak Games alumni, mobile game startup Dream Games took the lion’s share of the investment and alone accounted for over $ 200 million. Other startups have drawn attention with the seed money they received.

This infographic shows the number and amount of investments made in the Turkish startup ecosystem in the first seven months of 2021. (By Adil Girey Ablyatifov / Daily Sabah)

Support for the required platform

The success of gaming startups in mobile gaming has not gone unnoticed by giant tech platforms like Google. Startups export game services to these platforms. In addition, the majority of the market is held by American companies.

Evaluating Turkey’s potential in games, Seçkin Tokgöz, advertising marketing director for Google Turkey, said they estimate the number of users playing games during the pandemic period has exceeded 40 million.

“The fact that Turkey has successful mobile gaming startups encourages all businesses. With the support we provide as Google, we provide mentoring and marketing support to gaming startups. In other words, we encourage (the startups) with the support we offer at the start. We ensured the implementation of the Virtual Game Development Laboratory. This laboratory allows gaming startups to gain experience.

The numbers must increase

Announcing the seven-month results at the event, startups.watch founder Serkan Ünsal pointed out that the successful debut of game startups encourages entrepreneurs and investors, noting that Istanbul is the biggest studio hub. games after London.

“We estimate that 445 of the 533 game startups in Turkey are continuing their way. Some 48 of them have no activity on their website. In terms of investments, the $ 205 million funding Dream Games received in Series A and B is drawing attention. The emergence of startups like Dream Games every year will encourage the ecosystem. After all, we can’t reach these high numbers with just seed money, ”he added.

Diversity of the game

The event also hosted a panel to draw attention to the importance of diversity in gaming startups, including a section where Simay Dinç, the founder of ReContact Games and Woman in Games, met with investment fund managers.

Burak Yılmaz, chief investment officer of WePlay Ventures, one of the investment funds focused on gaming startups, said they had made seed investments to make them more focused, saying they had invested in 10 startups so far.

Yılmaz stressed that the right investment is more important than speed.

“We can say that the short-term expectations of entrepreneurs, including efforts to become a unicorn in a year, are dire,” said Ismet Gökçen, business partner of Ludus Venture Studio. “Unfounded expectations drive startups to make mistakes. It is not fair to go here because hyper-casual games make it easier to invest. As in Finland, a balanced gaming industry is important. There should be startups that focus on games that are persistent rather than those that focus on a lot. “

Yılmaz and Gökçen both pointed out that hyper-casual games only accounted for 20% of their total investment.

Focus on the numbers

Stressing that game studios need to be aware of investor expectations for seed investment, FunMonth Games co-founder Tolga Öztürk said entrepreneurs should be on top of all metrics.

“The investor must provide satisfactory information on the subjects which interest him. He has to put himself in the investor’s shoes and properly assess why he should invest, ”noted ztürk.

Udo Games founder Türker Karahan called attention to the importance of making accurate assessments.

“It is important to give realistic values ​​by doing a serious analysis. At first, the team itself gains more value. When the going gets tough, can the team handle it? The investor must be convinced of the answer to this question, ”Karahan said.

Talent hunters

Working to ensure that game industry startups have the right human resources, Alev Orbay from Kodluzun and Murat Kahraman from Game Factory also shared their thoughts on human resource continuity at the event.

Emphasizing that gaming is almost indistinguishable from product development, Orbay said developers and designers should be the role that decides the game itself.

“Once the general design of the game is revealed, artistic talents are highlighted accordingly. Designers and artists are chosen depending on whether the game is two-dimensional or three-dimensional. The operations team determines the game’s marketing strategy, and the support teams deliver solutions with a focus on finance and the like. We can prepare people with different abilities for the roles that game entrepreneurs need in 3 months, ”Orbay added.

Pointing out that they have brought many game developers into the industry, Kahraman said, “We bring developers into the game industry from many companies in the industry. The most important need is that of human resources.

“Gaming startups have issues, especially when growing their teams,” Kahraman said.

Crowdfunding

Fernvaille, Turkey’s first video game startup funded by Share-Based Crowdfunding, ended its investment round with two records.

The games startup, which is fonbulucu.com’s third campaign to raise awareness of the equity-based crowdfunding system and distribute capital, managed to raise 954,401 TL in pre-demand with 222% additional funding of some 600 investors.

The total demand from investors, who paid the company’s 8.4% share offered to the value of 516,000 TL, was 954,401 TL. Some 36% of the reported preliminary demand came from qualified / institutional investors.

While the startup funded in Turkey’s first crowdfunding campaign met all the requirements of the relevant legislation and received the funds it raised, the investors’ shares were distributed to their accounts with the Central Registry Agency (MKK). Thus, for the first time, the financing system was tested from end to end with the Share-Based Crowdfunding campaign. Investors can monitor their startup investments and transact with MKK’s free e-investor app.

Enis Erdem Yurdatapan, co-CEO of fonbulucu.com, said that accessing finance in Turkey is extremely difficult, especially for start-ups and that they have eliminated this problem with the tools they have developed.

“In fact, a new era has started with Fernvaille, the first games startup in our country funded by the Share-Based Crowdfunding system. 600 investors who invest in a games startup is a lot. In addition, it is gratifying for the industry and our system that more than double the amount required by the entrepreneur is required for financing. Gaming startups will now be able to scale faster by explaining their projects to investors and sharing them with them, ”said Yurdatapan.

Fernvaille Managing Director Gürcan Özgür, who closed the investment tour with great success, noted that they were using the system to reach the funds they wanted very quickly and at low cost, but it was much more important than 600 investors become partners of their companies. . Stating that they will be much stronger this way, Özgür urged all gaming startups that need funding to use this system.


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