A ground-truth thesis on Turkey's tech ecosystem for US investors. Real data, real deals, real risks named — written for the kind of LP who reads the footnotes.
This isn't a brochure. It's a thesis — the kind we'd walk you through over a 30-minute call, written down so you can read it on a Sunday.
Turkey's tech ecosystem has been a recurring "next year's story" for fifteen years. Sometimes it has delivered. More often it hasn't matched the breathless framing. What's different in 2026 isn't the breathlessness — it's the underlying mix of capital, talent, and deal structure. We think the picture is more interesting than the headlines suggest, and less interesting than the boosters claim. The truth is in the middle, and it's where the trade is.
What follows is what we tell our investor clients in writing: the numbers, unedited; the dislocation, framed honestly; the sectors where we see asymmetry; the risks, named and addressed; and where we think US capital wins — specifically, structurally, and now.
The headline story — total deal volume — is misleading without context. Volume halved from 2024 to 2025; deal count rose to a record. That gap is the picture — and it changes what kind of trade Turkey is right now.
Annual transaction volume per KPMG. 2024's inflation came from two deals: Kaspi.kz's $1.1B acquisition of a 65% stake in Hepsiburada (closed Jan 2025) and General Atlantic's $500M Series E into Insider (Nov 2024). 2025 contains Uber's $700M acquisition of Trendyol Go (May 2025). Not in this count: CVC's $5B buyout of Dream Games (Royal Match), the largest TR tech transaction since Zynga/Peak in 2020 — typically excluded from venture/startup totals as a secondary buyout. 2023 reflects the global VC winter and post-Getir restructuring. Sources: KPMG Turkish Startup Investments Review (2022, 2024, 2025); startups.watch ecosystem reports.
Deal count by primary vertical, 2024 full year. Source: KPMG / Anadolu Agency reporting. Note: AI's share is understated here — many fintech, gaming, and SaaS deals are AI-native; StartupCentrum estimates AI ventures account for 17.7% of all transactions across the past five years.
Three things are happening at once, and they don't usually happen together. Deal count is at a record high. Average check size is falling. Foreign investor participation hit a multi-year low in 2024 even as 44% of rounds still included a non-Turkish investor.
In a normal market, those three signals contradict each other. In Turkey in 2026, they describe the same phenomenon: the ecosystem is broadening faster than the capital base is keeping up. More founders, more rounds, smaller checks, less foreign dollar share — but the underlying pipeline of fundable companies has never been deeper.
For US LPs, this is the kind of mix we don't see often. The supply of deals is increasing. The competition for them is decreasing. And the macro overhang that scared foreign capital out — the lira, the geopolitical noise — is partially priced into entry valuations that are already 40-60% below European seed-stage equivalents.
That's the trade. Not "Turkey is going to outperform." Something more specific: capital that's willing to be in the room when others aren't will get pricing the next cycle won't repeat.
We're not sector-agnostic. Four areas show structural advantages — deep talent pools, real export traction, or capital efficiency — that we think compound over the next 24 months. Each is anchored by a deal foreign capital has already validated, and rests on sector economics that don't depend on the lira.
Turkey isn't producing frontier models. It is producing AI-native applications across fintech, customer engagement, and gaming at a fraction of US labor costs. Insider's $500M round set the ceiling. The interesting trade is one tier below, at seed and Series A, where engineering quality is uncorrelated with valuation premium. The talent pool — 88,000+ engineering graduates in 2024 — is the moat.
Turkey's currency volatility is the thing keeping institutional capital out — and the exact reason its fintech founders are world-class operators. Payment infrastructure, embedded finance, and core banking platforms have been stress-tested by conditions Western fintechs simply don't see. The result: capital-efficient companies that scale to MENA and CEE before raising Series A.
Peak Games (Zynga, $1.8B), Dream Games (unicorn 2021), Spyke Games, Paxie Games, Good Job Games — Turkey is now structurally one of the top-three mobile gaming producers globally. Lower marketing costs, deeper Unity/Unreal talent, and a culture of paid-acquisition discipline that Western studios are still learning. EntertechIstanbul is publicly targeting five more unicorns in five years.
Turkey's defense industry — Bayraktar, Roketsan, Aselsan — has gone from import-dependent to global-export in fifteen years. The startup layer beneath these primes is now where dual-use defense tech (autonomy, sensors, comms, materials) is being built. It's uncomfortable for some LPs. It's also where some of the most asymmetric returns of the next decade likely live, especially as European defense budgets reopen.
Most websites in this category skip this section. We think that's why most websites in this category don't convert. The risks that matter for cross-border venture in Turkey are knowable, namable, and addressable — and we'd rather name them up front than have them surface on a partner call.
The Turkish lira has lost over 80% of its USD value since 2018 and continues to depreciate at double-digit annual rates. A TRY-denominated investment that triples in local terms can still produce a flat or negative USD return on exit. This is the single biggest reason US LPs avoid Turkey directly.
We structure investments through Delaware or Cayman SPVs where possible; we model returns in USD with explicit FX scenarios baked in; and we prioritize founders building USD-revenue businesses (SaaS sold to Western markets, gaming with global monetization, defense exports). The portfolio that performs in Turkey is the one whose income statement doesn't depend on Turkey.
Turkey's political environment can change faster than diligence cycles. Capital controls have been deployed before. Sanctions risk — both inbound (Western sanctions touching TR entities) and outbound (TR sanctions on foreign assets) — is not zero. Corporate governance and IP enforcement vary by industry. These are real, and they're not what's covered in a CB Insights overview.
We don't recommend single-jurisdiction exposure. Most of the deals we structure include a Delaware or Cayman top-co with TR operating subsidiaries — standard practice for cross-border venture. We track regulatory changes monthly via our Istanbul office and brief clients quarterly. For sensitive sectors (defense, fintech licensing), we won't move without local counsel sign-off.
Even on a successful exit, getting USD out of Turkey can take longer than expected. Approval processes for large outbound transfers exist. Secondary sales of TR-issued equity to non-TR buyers carry their own friction. And IPO exits onto the BIST (Istanbul exchange) are mostly TRY-denominated, which reopens the FX risk question at the worst possible time.
We push for "Delaware flip" structures (TR sub of US parent) before the Series A wherever the founders are open to it. We pre-identify likely strategic acquirers and secondary buyers during the investment process — not at exit. And we maintain relationships with the legal counsel and bankers who specialize in cross-border TR exits, so the path is mapped before the deal closes.
Most Turkish founders worth funding eventually leave Turkey. The question is when, and at what valuation.
The pattern is by now well-documented. A Turkish founder builds a high-quality early-stage company. They raise locally at seed — at valuations 40-60% below European equivalents — because that's the price local capital pays. Then they raise a Series A, sometimes locally, sometimes from a European or Gulf fund. By Series B, they've either relocated the HQ to London, Berlin, or Delaware, or they've sold to a strategic. The "Turkey discount" they enjoyed at entry doesn't follow them; the trajectory does.
The sweet spot is between those two events. Catch a strong Turkey-Nexus founder at seed-to-Series-A, while valuations still reflect TR pricing, and you ride the rerating that happens almost mechanically when the cap table and HQ migrate. We've seen this play out enough times that we now design our deal sourcing around it explicitly.
That's why Ottoman Ventures exists, and that's why we think 2026 is unusually well-positioned for the kind of US capital that wants this trade. The seed-to-Series-A gap is structural. We are deliberately set up to live in it.
We brief US investors on current TR deal flow, sector dynamics, and specific opportunities quarterly. No pitch deck. Just the read.