Turkish fintech companies capture over $89 million investments
Global turbulence in the cryptocurrency market driven by large sales and volatility over the past year has plagued financial technology companies, often abbreviated as fintech.
The sting drove investments made in financial technology companies down to $75 billion, from $115 billion in 2021, so far this year, according to industry data.
In contrast, the high-flying Turkish fintech firms managed to lift the cash they raised to $89.1 million, from $67.7 million in 2021, even before the end of the year, the data from industry monitor startups.watch showed.
The amount in Türkiye shows that exposure to the volatility of the cryptocurrency market remained limited this year, also helped in part by the impact of regulations that have been implemented.
In addition, the fact that Türkiye has seen several billion-dollar worth of startups, called unicorns, emerge over the past couple of years is also said to have ensured investors’ confidence in the Turkish startup ecosystem.
Banks that had previously refrained from engaging in fintech initiatives and refused to cooperate began to feel the carpet slipping from under their feet for the first time with the introduction of more regulations.
It was difficult to see a single bank joining fintech startup investment rounds around five years ago, but seeing prominent lenders like Işbank and Fibabank alongside a fintech startup now shows how the transformation is affecting financial institutions.
The Figopara initiative has managed to convince the two banks through its promise to solve the financing problems of small and medium-sized enterprises (SMBs) through a single application.
In addition, the top executives of the two banks have promised to support Figopara’s growth abroad with concrete measures, underscoring what they expressed as a sincere belief that the company would become a billion-dollar financial technology initiative.
Change in customer behaviour
In addition to the regulations, the change in customer behavior must also have had a major impact on the major transformation.
One of the initiatives that encouraged fintech startups was the successful sale of fintech iyzico.
The sale of iyzico to PayU for $165 million in 2019 proved to be an important indicator for investors, while giving morale to financial technology ventures from Türkiye.
The agreement followed a significant increase in the involvement of corporate and venture capital funds in financial technology start-ups. But there has been no strong exit agreement yet.