Revo Capital, a Turkish venture capital firm known for backing tech unicorns like Getir and Builder.ai, is gearing up to launch a $100 million fund dedicated to investing in artificial intelligence-driven startups in the region.
This new fund, Revo’s third, represents a strategic expansion as it marks the firm’s entry into the energy and gaming industries, according to Managing Director Cenk Bayrakdar. The fund’s primary focus will be on companies developing AI and big data solutions, while also considering opportunities in fintech, health, cloud security, and B2B cloud software.
Bayrakdar emphasized that 80% of the newly raised funds are expected to be allocated to Turkish companies, with the remaining 20% earmarked for ventures in central and eastern Europe. The fund aims to support companies that leverage local talent to build a global presence, emphasizing the importance of a hard-currency revenue stream to enhance appeal to foreign investors.
“We only invest in global companies or in companies that have a global business,” Bayrakdar stated, highlighting the global perspective that attracts foreign investors. The fund’s strategy is aligned with seeking companies capable of using local resources while expanding their reach on a global scale.
Revo Capital plans to achieve a first close of $50 million to $60 million in March, with a final close target of $100 million and a cap at $150 million. The firm aims to continue its track record of investing in successful and globally-oriented startups.
However, the fundraising efforts come amid challenging economic conditions, with inflation impacting valuations and contributing to a decline in private equity and venture capital investments globally. Despite these headwinds, Revo Capital remains optimistic about the opportunities in the Turkish and regional markets.
Notable success stories such as Getir and Peak Games have brought attention to the potential of Turkish startups in recent years. Nevertheless, the overall venture capital investments into Turkish startups saw a decline, with $154 million recorded in the first nine months of the current year, compared to $1.26 billion in 2022, according to data from startups.watch, an Istanbul-based monitoring firm.
Revo Capital has secured funding from global financial institutions such as the European Bank for Reconstruction and Development, German Investment Corporation, European Investment Fund, and International Finance Corporation in its previous funding rounds.
The firm successfully raised $66 million for its first fund in 2013 and followed up with a $98 million second fund in 2020. Managing Director Cenk Bayrakdar mentioned that the second fund is nearing its conclusion, with plans to make its final one or two investments in the coming year.
Source: Bloomberg