In a former belt factory on the outskirts of Istanbul, Sina Afra and his 500 employees are building what the German-raised Turk says will be the country’s first billion-dollar e-trade company.

Afra’s Markafoni, the second most-visited members-only shopping network in the world, is a frontrunner in an industry that grew almost 60 percent in Turkey last year and has attracted investment from EBay Inc. (EBAY), Inc., Kleiner Perkins Caufield & Byers,Naspers Ltd. (NPN) and Tiger Global.

His main competitor is Harvard Business School dropout Demet Mutlu. Her reached $100 million in revenue less than 18 months after going online. Both are representative of a crop of young Turkish entrepreneurs who are returning from abroad to lead a transformation of their country, with its China-like economic growth, from a low-cost manufacturer on the fringes of Europe to digital dynamo.

“All the trends are pointing in the right direction in Turkey,” Aileen Lee, a partner at Kleiner Perkins (ZZISK), which together with Tiger Global invested $50 million in, said in a phone interview from Menlo Park, California. The venture capital firm counts Zynga Inc. (ZNGA) and Groupon Inc. (GRPN) among its progeny.

“You have a young society that’s really social and has really embraced the social web and mobile,” Lee said. “At the same time, the retail infrastructure has not been built out, so there’s a real opportunity to leapfrog the typical bricks-and- mortar retail commerce.”

Online ShoppingTurkish e-commerce transactions increased 57 percent to 22 billion liras ($12.3 billion) in 2011 from a year earlier, according to the Interbank Card Center, which monitors transactions. Forrester Research Inc (FORR) says e-commerce will grow just 12 percent annually in Europe over the next five years.

The torrid growth rate has given rise to more than 30 internet companies starting up in January alone. That has some worried. The market may be “a little frothy,” said Pamir Gelenbe, a venture partner for Antwerp-based Hummingbird Ventures. “There’s a great crop of entrepreneurs, but now there’s a little too much excitement and hype.”

‘Double-Digit Growth’Those entrepreneurs busy building their businesses don’t see it that way. “We have 4.5 million members and we’re seeing double-digit growth every month with no slowdown,” said Mutlu, who attended this year’s World Economic Forum in Davos,Switzerland, and was praised in GQ as one of the “conference cool” at F.ounders, the “Davos for geeks” in Dublin. She’s 30 years old, dresses in clothes she designed for the website’s new private label and says she wants Trendyol to be Turkey’s first tech company to go public on the Nasdaq Stock Market in New York.

That’s if Markafoni doesn’t get there first. The 43-year- old Afra has rebuilt the old belt factory into a bare concrete and glass headquarters called Markafoni Plaza, with its own café and terrace. While techies huddle around design computers and models smoke cigarettes near a Range Rover parked outside, he explains that the company takes more than 12,000 photographs a day to market name-brand clothes, cosmetics and shoes at discounts of up to 90 percent.

Acquisition DriverA former EBay manager in Berlin, Afra settled in Turkey in 2008 and three years later sold 71 percent of Markafoni to Cape Town-based Naspers for about $200 million. It was one of the biggest foreign commitments to an industry that Deloitte & Touche says will help drive Turkish acquisitions in 2012.

Cem Sertoglu, founder of venture capital firm Young Turk Ventures, said e-commerce will continue to grow by a double-digit percentage. The 40-year-old created and sold New York-based social networking company SelectMinds Inc. to Bessemer Venture Partners. Like Afra and Mutlu, he’s an example of a reverse brain drain that’s spurring innovation.

“It took me 17 years to come back,” Sertoglu said over lunch in Istanbul. “I started a company when I was 28 in the U.S. because being in New York looked much more attractive than a life in Turkey. By 2006, Turkey started to look like a normal country to a person like me, and now it’s becoming one of the most interesting digital markets in the world.”

Like ChinaTurkey has more than 34 million internet users in a population of 74 million, according to Comscore, making it the world’s 13th largest internet market. Its $735 billion economy, the largest in eastern Europe and the Middle East, grew 9.6 percent in the first three quarters of 2011, trailing only China in the Group of 20. Half the population is under 30.

“We see a dynamic in Turkey of young entrepreneurs with great training, lots of talent, who often worked abroad and are returning,” said Roland Manger, a partner at Munich-based Early Bird Venture Capital, which invested about $4.5 million in Istanbul-based games developer Peak Games. “What we saw eight years ago in China and India when the best and the brightest started to come back to build companies, is happening there.”

The privatization of telecom monopoly Turk Telekomunikasyon AS (TTKOM) and the emergence of cloud computing, which allows software distribution via the web, accelerated development, according to Selahaddin Karatas, founder of Istanbul-based mobile software companies Aradiom and SolidPass.

Cloud Flattening“Turkey had a very advanced e-commerce scene starting in 2000 in terms of the offerings, but they never materialized in terms of revenue,” said Karatas, who returned in 1999 with an economics degree from Wesleyan University in Connecticut. “When Turk Telekom was privatized, almost overnight a whole new class of e-commerce companies emerged simply because the disconnect between the offerings and the user base was bridged.”

Saudi Oger Ltd. bought 55 percent of Turk Telekom from the government for $6.6 billion in 2005 and began expanding broadband access and improving speed. “With the advent of the cloud, the level of the playing field is being flattened,” Karatas said.

EBay, the largest online auctioneer, bought a minority stake in retail marketplace Gittigidiyor in 2007 and increased its holding to 93 percent last year. Ticketmaster owner IAC/InterActiveCorp (IACI) bought vendor Biletix. Hummingbird Ventures joined Early Bird in the Peak Games investment. And Amazon (AMZN) invested in, an online florist founded by Emre Aydin, a former SAP AG consultant.

Flowers for MomAydin started his website when his brother called from the U.S. and asked him to send flowers to his mother and mother-in- law in two different cities. Aydin looked online, realized it was impossible, and started building a site the same night, he said in an interview. “I didn’t know what a VC was,” he said, referring to venture capital.

In nine months, Aydin had 20 trucks. Revenue tripled every year as he switched to fulfilling orders through florists rather than storing flowers in his own warehouses. “I didn’t search for Amazon, we just met by chance. They were amazed at our growth. They offered to invest, but we didn’t need funding.”

Aydin sold about 18 percent of the company to Amazon for an undisclosed amount last year, and still works at a plain desk in a poorly lit office in central business district, while city buses on the roads outside are plastered with Ciceksepeti banners. The company expects sales of about $38 million this year and is looking to buy gift-industry competitors.

Atomico, the venture capital firm started by Skype Technologies SA and Kazaa BV co-founder Niklas Zennstrom, opened an office in Istanbul in January to look for deals in Turkey. The London-based firm boasts Rovio Entertainment Oy, creator of the “Angry Birds” game, among its investments.

Credit Available“If you look at the macro level in Turkey, everybody knows the numbers, and these are great,” said Wouter Gort, who manages Atomico’s Turkish operations. “If you look at credit card penetration, willingness of people to buy online, and new people entering online with enough consumption strength to buy, these are all bullish signals.”

That doesn’t mean every online venture will succeed. Clones are common, as companies take advantage of low barriers to entry. The owners of the leading food and flower delivery sites won’t talk to each other because their companies share a suffix. Yemeksepeti, which came first, means “food basket,” while Ciceksepeti means “flower basket.” Both play off the age-old Turkish custom of receiving deliveries from street peddlers via baskets dangled from a window.

Investors are also concerned that a reversal in Turkey’s economy could quickly put a damper on the e-commerce party. Goldman Sachs Group Inc. (GS) and the World Bank say Turkey’s debt and trade imbalances, especially a current-account deficit of $77.8 billion or 10 percent of GDP, make the country’s economy vulnerable.

Trendyol’s Mutlu is sanguine: “Of 30 million people online, only five or six million have bought something online, which means there’s room for growth. And we’re a discount business, so even a downturn could help.”

Global LeadersThe largest U.S. private shopping site, Gilt Groupe Inc., gets fewer than one-third of the unique visits that Markafoni and Trendyol receive, according to Idil Kesten at Comscore. Gilt Groupe is valued at $1 billion on SharesPost Inc., which allows investors to trade in venture-backed private companies.

Using Comscore data, Markafoni says it trails only France’s Vente-Privee, a joint venture with American Express Co. (AXP), in unique visits to a members-only shopping network. Trendyol is third in unique hits, according to Comscore data, though it surpasses Markafoni in overall hits, with nearly 15 million in February.

Burak Buyukdemir, who earned an MBA in Berlin and founded the e-Tohum startup camp in Turkey, said companies are making the transition from copycats to innovators. Examples include Minder, which is working on control systems using brainwaves, and Buggum, with a game optioned by Electronic Arts Inc (EA).

“All of my friends in the U.S., in the long term their dream is to come back,” Buyukdemir said. “They see the opportunity, and the success stories we’re seeing now have a snowball effect.”

Investment PaceNevzat Aydin, no relation to Ciceksepeti’s founder, co- founded food delivery portal in 2000 after dropping out of a master’s program at the University of San Francisco. He expects two or three e-commerce investments of $200 million or more in Turkey this year and a “serious increase” in the $50 million to $100 million range.

Yemeksepeti has expanded to Russia and Dubai, and is in the process of starting operations in three more countries, illustrating what Manger of Early Bird says is Turkey’s opportunity to become a regional e-commerce hub.

“Turkish companies are very eager to expand into markets that the West is less familiar with,” Manger said. “Add in the Middle East and Central Asia and you’re adding in hundreds of millions of potential new customers.”

Says Nevzat Aydin: “Turkey’s geographical location, proximity to Europe and the Middle East, good Internet penetration and young population present a big opportunity. We’ll have this ‘Internet spring’ for some years to come.”

To contact the reporters on this story: Benjamin Harvey in Istanbul at; Ercan Ersoy in Istanbul at

To contact the editors responsible for this story: Gavin Serkin at; Mark Bentley at

Source: Bloomberg
We had shared the news on the new round investment Trendyol received from major global investor companies Kleiner Perkins Caufield & Byers (KPCB) and current investor Tiger Global and official information that were confirmed. Following the first hearsays we shared with you on July 22, we published the rates of company’s shares on official records in August, but the company did not give my official statements.

Today we have received the long waited statement on the investment from Trendyol. According to the statement, the total amount of investment is 26 million dollars. With the last round investment, the company with 4 million members and 350 workers has received a total of 50 million dollars so far.

An infographic was shared along with the statement from Trendyol. The size of Turkish internet market and its potential is highlighted in the infographic, while there are various stats regarding Trendyol. Information including the fact the there is a sale made online every 5 seconds and 12 million visitors visit the web site every month could grab your attention.

Source: Webrazzi

Multimedia juggernaut Naspers has entered the Turkish internet market with a bang by acquiring approximately 70 percent of the shares of markafoni, a Turkish private shopping club, through its subsidiary MIH-Allegro. Our source in Turkey says the investment values markafoni at around $200 million.

Markafoni is the third biggest ecommerce company in Turkey, and has ambitions to become a global brand.

The acquisition includes markafoni’s operations in Turkey (3.5 million registered members) and Ukraine in addition to Zizigo, the largest online shoe retailer in Turkey.

Naspers’ purchase of a controlling interest evidently changes the share structure of markafoni significantly. Existing investors have exited with the exception of the company’s founders and management, which will remain in charge.

Markafoni chairman Sina Afra and board members Tolga Tatari and Ahmet Emre Sarı hold the remainder of shares not owned by MIH-Allegro as a result of the deal.

Over the past two decades, Naspers has managed to evolve from a traditional print media business operational in a single country to a publicly listed e-media company operational in multiple markets. The group’s most significant operations are located in emerging markets, including South Africa and the rest of Sub-Saharan Africa, China, Latin America, Central and Eastern Europe, Russia and India.

Naspers holds a 34% interest in Hong Kong-listed Tencent, China’s largest internet services portal, a 29% stake in Group, the leading internet company in Russian-speaking markets and a 95% stake in BuscaPé, a ecommerce companies that operates in Latin America (primarily in Brazil), among many other investments.

Source: Techcrunch Eu

Intel Capital’s investment to Nokta was confirmed a few days ago, as you all know. And this investment was the first of 50 million dollar fund that Intel Capital, major investment companies in the world, has to invest in Turkey, Middle East and Africa, and also first investment of the company in Turkey.

So, which company will get investment after that?

Actually we made some guess as to what the answer would be according to the hearsay we received a few months ago, but were careful to share it with you as it was not for certain. But as our resources have confirmed that negotiations are coming to final rounds, we wanted to share the news first with you, as usual.

If nothing goes wrong, Intel Capital’s second investment will be to Grupanya, one of the leaders of group shopping market in Turkey.

Grupanya Valued at $40 million

As we have heard, the company has been valued at the level of 40 million dollars, and with this investment, it will be included in Intel Capital’s partners as minority shareholder.

I want to especially highlight that, Intel Capital’s investment to Grupanya has yet to be confirmed and no contracts have been signed yet. However we know that negotiations have been continuing for a while, and the company has come to a certain point of agreement with Grupanya, as our important contacts have shared with us.

Foreign investors’s interest in Turkey Internet market will increase

We are not sure when the contract will be signed and it will be announced, but what we are sure of is that, foreign investors will be following Turkey very closely with the investment Intel Capital has made and will make in Turkey Internet market.

We are waiting for the confirm of the issue, however will be sharing any developments with you, if any occurs.

Source: Webrazzi is one of the private shopping start-ups in Turkey, which is not very known to public yet, but is continuing with firm steps forward. It has recently finalized the investment negotiations that we have been hearing about for a while.

Investor of major companies including Skype and Baidu, ePlanet Capital has made an investment of 5 million dollars in

We also been informed that there will be a press meeting regarding the investment and the details of the investment will be shared there. in fact had long been having negotiations with ePlanet Capital, but we did not share this news within the negotiation period with you as we did not have any confirmed information on the issue, or any agreement news with the company.

As of yesterday, the investment of 5M dollars became official, and a very major agreement for Turkish internet market has been signed.

Source: Webrazzi
Tiger Global, known for its investments in companies including Mynet, Trendyol and Yonja Media Group, has been realizing its investments at close contact with Emre Kurttepeli, and now it has partnered with him for a project this time. This project is called, and while giving service with traditional e-trading model focusing on sportswear, shoes and accessories, it provides sales offers on its “Offers” page.

We have learned that Tiger Global and Emre Kurttepeli have partnered for the start-up with 50% shares. While the service is already providing service for a vertical population, it also highlights its line by focusing solely on sports products.

Emre Kurttepeli had participated in Webrazzi Agenda: E-Commerce meeting held in March 16, and told about the opportunities in vertical e-commerce and his interest in this field. While stating that there were higher profit margins in this field when compared to conventional e-trading models, he also added that he wanted to make investments in this area.
Emre Kurttepeli’s investment and his 50% share partnership with Tiger Global on this investment have another strategic significance.

Tiger Global’s authorized person Lee Fixel, who has always been closely involved with the company’s investment decisions in Turkey, is also in the members’ board of Brazil based NetShoes, which gives the same service as So we can say that this co-investment is not only a step into an open area in Turkey’s internet market, but also a part of a successfully designed global strategy. will try to create its own market in shoe industry as Pabbuc and Zizigo did, and if it becomes successful, will probably be bought by another e-trading group that is providing global service. At the moment it seems that this possibility will be realized in parallel to NetShoes, but before that will need to create its own user population and make higher margins in Turkey.

Source: Webrazzi
Picture first drew attention with the investment it got from Pond Ventures in July 2010 and now we have learned that 2. investment round has been finalized for the company.

While the amount of investment for the first round was not announced back then, we had heard that it was at the level of 500 thousand Euro. Now we have learned from our sources that will receive an investment of 2.5 million Euro for the second round, which is to be finalized these days.

Following the first investment from Pond Ventures, added offer website concept in addition to its places guide. The company both provided sales offers from businesses under the named Mekanist Fırsat (Mekanist Offer) with a widely known model, and enabled businesses enter their own offers to the system, which can be considered second version of group shopping websites with the name Mekanist Market. sees its offer operations only as a supportive element for its places guide, and is planning to go further than only providing offers as FourSquare does, and position the offers as an additional feature around businesses and locations. has more than 120 thousand location info and more than 100 thousand members. Even if is one of the most popular services in its field in Turkey, we cannot say that it has succeeded as much Yelp has done in the US. However the company is taking firm step forward and it has a strong position with Emre Berkin, ex senior manager of Microsoft, and the investment it has received from Pond Ventures.

As far as we know, in Turkey is the only investment of Pond Ventures, which will transfer capital of 3 million Euros to Turkey market with the second round investment. It is possible that the company will be interested in other companies in the field, and I consider this second round investment a major development as it will further attach the company to the market.

Source: Webrazzi

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