Jose e Romano ano Europ ropean ean Investm stment ent Fund d (EIF) F) Creat ating ng Winning ng Nationa onal Innova ovati tion on Ecosystem systems: The Case of VC/PE PE in Turke key
Table of Contents 1. 1. Why is Public Interv rvent ention n Needed ded At All 2. 2. Vent nture ure Capital al / P Privat vate e Equity ty in T Turke rkey 2006 – 2016 2016 3. 3. EIF’s Impact in Turkey 4. 4. Some e Factors tors to Have e in Mind 5. 5. Concluding cluding Remarks rks 2
Bringing down policy to market needs Addr dressing essing a GAP Gaps ps in Access ss to Finance ance or/and nd Expertis tise E.g. YOZMA MA in Israel el DEMON ONST STRA RATIO TION effe fect Prov ovid iding ng a l learnin ing g curve e and signal naling ng effect E.g. NEOTEC C VC Prog ogram amme in Spain in CATAL ALYST ST for r deve velopm lopment ent Accele lerati ation on of the proce cess ss / trend E.g. iVCi in Turkey All l of these se are are interd erdep epen ende dent nt 3
Snapshot 2006: “catch up” phase = opportunity 2005 Investment as a % of GDP 2001 • Significant reduction in macroeconomic Structural reforms vulnerabilities – Countries of Destination • Healthy financial sector Fiscal discipline • Growth (average an. growth of 7.5%) 2004 • Disinflation (from 70% to 8%) Prudent monetary policy • Declining real interest rates Turkey Turkey Turkey Background of Virtuous Cycle continued political Including privatisation of stability, structural An expected US$5bn banks and the energy and reforms, fiscal of FDI per annum telecom infrastructures discipline and monetary discipline Privatization FDI EU Accession Process Productivity gains Macro-le level l Stability bility & Trend IMF reform program ramme adhered d to Investments Output growth Fundamentals going the ‘right’ way EU converge genc nce process Increased investor confidence Large ge and young g populat latio ion Employment growth & higher Istanbul’s true cross road locat atio ion disposable incomes + Re - rating of Turkey Micro-le level Reduced funding costs Entre repre preneuri rial al culture re Qualif alifie ied d foreign gn train ained d manage gement Sustainable Economic Growth Conglomerat re deal rate struct cture l flow Source: Actera Partners Surge ge in FDI exit strat ategie gies ↑ Functionin ing g stock exchange ge 4
VC/PE Landscape in 2006 Manage ged From Abroad ad ence l Presenc Local Local Presence Locally lly Turkven Based Small l Cap p < E EUR50 50m Mid Cap EUR50 50m – EUR20 200m Large ge Cap > EUR20 200m 0m Target et Compan any y Size Source: Industry Players 5
VC/PE Landscape Today Kleiner Perkins Global Finance BC Partners Hummingbird EMF Capital Partners TPG Managed Argus Capital RTP Ventures Pinebridge From Axxess Capital Providence Colony Capital Cinven Abroad Investcorp Pond Ventures Eastgate KKR Swicorp Pine River Ribbit Capital Local Presence HSBC Advent International Bancroft Bridgepoint Local NBK Capital NBGI Abraaj SEAF Presence Bedminster Carlyle Kerten Mid Europa 3ts Capital Revo TRPE Fiba Capital Actera Group Intel Capital Earlybird 212 ACT Standard Unlu Darby Turkven DCP Kobi AS Verusaturk Locally ADM Capital Aslanoba Capital TaximCapital Based Is Girisim iLab iLab Pera Gozde Girisim Mediterra Ida Capital Inventures Esas Holding Crescent Eurasia Angel Wings Innovent Small Cap < EUR50m Mid Cap EUR50m – EUR200m Large Cap > EUR200m Target Company Size Source: Industry Players 6
EIF’s First Intervention – Istanbul Venture Capital Initiative iVCi addressed essed the «backbone kbone » o of the industry try EUR160m m FoFs (2009) Seed stage funds Public c Private vate Partn rtnersh ership Specialised funds Early stage funds Invest stment ent Strategy tegy Generalist funds First st Time Funds Growth funds Establ blish shed d Funds Buyout funds Experie ience nced Funds Portfo rtfolio of 10 funds Over 50 compan panies reach ched ed Positi tive e Side Effect cts 7
EIF’s Second Intervention – Turkish Growth & Innovation Fund TGIF F now w includes des «innovat ovation on» EUR 2 200m m FoFs (2016) 6) Technology Transfer Capital Markets Public c Private vate Partn rtnersh ership Biz Plan competitions Seed stage funds Specialised funds Invest stment ent Strategy tegy Early stage funds Associations First st Time Funds R&D Grants Generalist funds Growth funds Establ blish shed d Funds Regulation Buyout funds Experience nced Funds Challenge funds Debt finance Structured finance Three ee Fund d Appro roval als To Date te 8
TTA Turkey (1) This project is co-financed by the European Union and the Republic of Turkey Thi This fin finan ancing ng is is pr provi ovide ded from from IPA fun unds ds alloc allocated ted to to Regi egional onal Com Competi petitive tivenes ness Opera Operati tional onal Programme ogramme which which is is su support pported ed by by EU EU and nd the the Repub epublic of of Turke urkey. The The Contr Contracting cting Authori thority ty of of thi this Proj roject ct is is the the Mi Minist stry of of Sci cien ence ce, Industry ndustry and and Tech chnolo nology, DG DG for or EU EU an and Fore oreign gn Relati tions ons, IP IPA-PO PO, and fin an final al bene beneficiary ciary is is the the Scien enti tifi fic and and Technol echnologi ogica cal Rese esear arch ch Coun Counci cil of of Turke key. 9
TTA Turkey (2) TTA T Turkey is investi ting g in: proof of of concept pt generati ation projects ects universi ersity ty / res resear earch ch ce cent nter er spi spin-offs, start start- ups intellectu ectual al propert erty (IP) asset ets / projects ects re retur turn for or eq equity uity int nto start start-ups, ups, spi spin-offs, and SMEs SMEs 100% of t the investm tmen ents ts will be made e in Turkey A minimu mum m of 5 50 projects cts to b be select cted ed by the Fund Manage gers rs by 31 December mber 2017 2017 At l least t 25 project ects s shall be identified ed and investe ted d in t the Target et Region (12 NUTS II, 43 province nces) s) 10
TTA Turkey (3) IPA A Resou source rces EIF as Adviso sor & Projec ect Manag ager er DCP @EUR30m 0m ACT @EUR22 22.54m 4m First closing 01/04/2015 22/07/2015 date Visibility In total, at least 30 30 In total, at least 20 20 Impact Advisor isory TTA Turk rkey ey Fun unds ds direct investments to direct investments to Evaluation Criteria Serv rvices es projects/companies projects/companies from Turkey from Turkey and nd Netw tworki orking ng Current 01-Apr-2015 22-Jul-2015 11 investments 4 investments situation* proceeds Location of Istanbul, Ankara, Kocaeli, Kayseri, 22-Dec-2015 investments Samsun, Trabzon, Gaziantep, Van, Izmir TTOs TÜBİTAK IPA: instrument for pre-accession assistance 11 * As of September 2016
Main objectives of the TTA-Turkey Advisory Services and Networking Project Provi ovidi ding g Strat ategic egic Guidance ance and Assess essment ment for or TTOs while e building ding practica tical • skills s in commercializ rcializati tion on Increas easing ng the Pipeline e Deal Develo elopment ent for or TTA Turkey rkey Funds • Advancing TUBİTAK’s capacity in commercialization of R&D • 12
To achieve these objectives (1) - A call was opened ned for or TTOs, , 10 + + 10 T TTOs s were e selec ected. ed. - First st 10 T TTOs s are developin oping strategic egic plans s with the guidance ance of the Projec oject t Team and these e will be paired ed by US and FR TTOs - 40 T Teams s from om 20 T TTOs s are recei eiving ving VPD PDP P training ning from rom US expert erts s based d on lean start-up up methodo odology ogy. . - Project Team is working with TÜBİTAK Program Managers to improve their technol nology ogy commerc ercial alisa sation and TTO Support port Progra ograms 13
To achieve these objectives (2) - Busines ness s Developm velopment ent experts rts have e and continue tinue to visit TTOs to review ew their r port rtfoli folios os - Relations ns have e been established hed with univers rsities, es, technoparks, noparks, incuba bati tion on centers ers, , accelerator erator progra ograms, ms, angel grou oups ps and other er VCs - Port rtfo folios of differe ferent nt progr grams/ ams/orga organizat nizations ns have e been evaluat ated ed; ; BD expert erts s are worki rking ng with founders unders of prom omising ng deals s to be conside sidered red for or funding ding. 14
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