First of a series of interviews with investors in Turkiye: Enis Hulli, 500 Istanbul

Enis Hulli, 500Istanbul. Series of interviews with investors in Turkiye.

It is exact 2 years ago the first acceleration program of Startup Bootcamp Istanbul came to an end. Demo Day was a big success and I had fun dancing with Ersin Pamuksozer on stage. This was a first in Turkiye in many ways and I was extremely happy I was part of this adventure. A young guy with a young beard dropped by regularly discussing investments with Gülsüm Ciraci, who later started Istanbul Startup Angels. For a yabangi (foreigner) like me it is always a pleasure to meet somebody who speaks fluent English so we started chatting. I learned he was an engineer and into heat and cooling systems, established his own office in Istanbul with a crew working for him. We became friends very quick and I made him crazy about startups (although he was already starting to figure out the scene in Türkiye).

Enis Hulli is what they call in corporations a “high potential”. The speed he developed in understanding the startup scene and the entire context around it, from important to utterly bullshit, was very surprising for me. He developed very quickly his own value set while sucking up all possible info. Homework was his hobby. About a year ago he was introduced to 500Startups like all of us around the same time. I remember Dave McClure, cofounder 500 Startups, announcing the start in Istanbul at the Startup Istanbul event in October 2015. My reaction was simple at that time: We don’t need a Marshall plan (as we have no startup scene, or like we don’t have money here).

Today 500 Istanbul is an up and running VC, early stage, since a couple of weeks. Surprisingly enough the money from investors landed on the bank account in the days right after the coup. With a fund of 15–20 million $ to invest, the team, Rina Onur and Enis Hulli, are ready to rock I say. Most of you know Rina thanks to her unprecedented background as co-founder in 2 highly successful startups Peak Games and Hemenkiralik.

Çeşme, where else when you are from Izmir, is a good place to have a chat about the 500Startup path in Turkiye till today. We first touched the main point not to lose valuable time. Where are the startups in Turkiye? The main hot cities for startups are Ankara, Izmir and of course Istanbul as the ultimate center with almost 20 million people living here. Despite these big numbers, most investments are still in San Francisco, US. Touching on the dealflow, or the lack of it, Enis’ vision was that we miss some key attributes with vision and learnings as the key ones. Language makes also a part of it, or rather the lack of it and at the same time the only language Silicon Valley understands. English. Turkish startups have a lack of looking outside their own country, lacking good knowledge of English and too easily trapped by the big internal market. Startups are about scale but as we don’t connect enough with the outside world, we are not in sync with Silicon Valley, London or the Berlin scene.

This brings us also to a very important attitude problem, which is homework. Too easy, young would-be-starters think they have a brilliant idea without the necessary checks. These problems are not new, so I wondered why 500Startups wanted to come to Turkiye with a very small number of scalable startups and a rather unstable political situation. For Enis the potential is there in Turkiye but as a fund they are not limited to startups in Turkiye only. 500Istanbul heavily invests into the Turkish diaspora and companies with significant Turkiye operations. This gives the necessary flexibility to create a well thought through portfolio. The result is that Rina and Enis go out pro-actively to find investment opportunities, as they are not waiting in the office at Kolektif House until someone comes over. I know Enis as a hunter for knowledge but he does the same in finding investment opportunities. Referrals are also an important tool. In order to spread risk and be part of more opportunities 500Startups invests a lot as a co-investor. Interesting is that they are now trying to create a standard SHA (Share Holder Agreement) that is short and comprehensive so it makes negotiations easier, more transparent. In Turkiye we don’t have the same toolset as in the States for example like, stock options, vesting, liquidation preference etc. It is interesting to understand that the trust in the teams by 500Istanbul is big. Most important is an open and transparent communication to be able to react pro-actively when needed. In the selection process the focus is on the team and on their professional approach and their specific domain expertise or related experiences. On a side note, the average founder age in the States, but also in Berlin is way over 30 years and practically always mixed international teams, something we don’t see in Turkiye.

Asking if it was easy to collect the investors, necessary to start the fund in Turkiye, the obvious answer was no. We have only a few VCs in Turkiye who are active with mixed results and overall investors have a heavy focus on real estate and manufacturing, not startups. A situation I remembered from Belgium 20 years ago. It drove me nuts in these years and we didn’t have internet back then, depending on magazines and conferences abroad to understand what was happening. After Rina joined in mid- 2016, it took them 4 months to do the first close. No doubt that this is a big achievement in a very conservative and risk averse environment. No time was wasted and the first investments have been done once the fund was available. As of today where invested: Carbon Health, Skyfunnel, MovieLaLa, Mall IQ, Plum, PVGNA,Massive Bio. More will follow.

There is only one little problem, the shortlist is really short as we still have this small dealflow and a lack of good quality. 500Istanbul will hunt them down anyway but it is clear that only a pro-active approach can lead to success in this region.

When asking Enis what he considers success, he split the question in 2 answers. From a business point of view he wants 500Startups to be successful with a positive result for the investors so new funds can be created, bigger ones, in order to increase the ticket size but also the number of investments. The Mena region has a known high potential but we lack the intensity, professionalism and volume next to a more global approach. 500Startups can be one of the drivers towards a real success backed with an international organization and approach. Personally he actively wants to help improving the quality of the startup ecosystem in Turkiye. He is very approachable and ready to help where he can. I didn’t ask the typical “when do you get married” question as I know that he is very focused on his job although he admitted that his colleague Rina surpassing him big times in every aspect. Funny thing is that Rina was the first ever person from Turkiye I saw on a stage in an international conference, years ago at a WebSummit in Dublin.

Turkiye is a dynamic country in a dynamic region. Never a boring moment here but always great weather and great nature fed by the famous Mediterranean diet. Like any startup, the team is key. 500Startups has the team. Inşallah my friends.

Patrick Bosteels

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