The Growth Of The Tech Ecosystem
This article is written by Jeremiah Uke, a Contributor Author at Startup Turkey.
Fadi Ghandour, executive chairman of Wamda Group and refined venture capitalist was part of a fireside chat at Startup Turkey 2018, he shared knowledge on the startup journey and growth of the tech eco system in the region.
According to Fadi, he started investing in startups in 1999, a time when there was little or no activity in the tech space, up until about a decade later when the tech revolution was being felt in full force, the ecosystem saw the emergence of more incubators, accelerators, venture capital, increase in government interest and changing of laws to accommodate the startup culture.
This progress came as a result of 2 factors, one being the digital revolution itself which is still ongoing today, and the second being the fact that there is a challenge with the change of technology in creating a 21st century economy, making governments and big corporations try to get accustomed to speed at which changes occur in the economy and the role of technology in this.
Comparing the ecosystems in various subregions, the numbers are quite encouraging as regions like Israel have over 220 accelerators creating over 3000 startups in a year, and attracting almost 7 billion dollars in investments to the region, Fadi believes that the Turkish ecosystem is way behind in that sense, using the United States as an example, Fadi talks about the venture capital in America being 0.5% of the GDP, also mentioning that Israel’s startup market sees a fresh influx of funds in the range of 2-3 billion dollars per year, he goes on to add that governments in these countries are already carrying out incubator and accelerator duties, where they groom new technologies which can be adopted in real life, Fadi mentions that many of the businesses and products used today went through the government accelerator are commercialized government initiatives.
On the other hand, Turkey sees an influx of funds in the range of 200-300 million dollars per year, for an economy that is bigger and even more diverse than that of Israel, so to encourage the quick development of our ecosystem, we definitely need to devise a new and effective means of bringing more money in investments to the region, asides from this, Fadi expresses that Turkey has the right environment for startups to grow and expand in terms of scaling, but other parts of the region experience fragmentation, this sort of denies the startups springing from these other parts the opportunity to move as fast as their counterparts.
Fadi buttressed this point by mentioning the speed it would take a startup in Silicon Valley to scale which is relatively very fast, while startups in this region would struggle with the ease of breaking into the market amongst other limiting factors. In conclusion, Fadi acknowledges that we have made good progress over the years, but there is still much to be done.