By Deniz Kilinc
FONBULUCU.COM, a share-based crowdfunding platform for Turkey-based startups and entrepreneurs, has a goal to provide everyone a chance to invest with just a few taps on their smartphones. As the interest in startups and entrepreneurship rises domestically and globally, the platform, the 8th of its kind in the world, has an ambitious target of TRY 1bn in trading volume by the end of 2023.
Over the past decade, interest in startups has surged globally as various success stories have inspired entrepreneurs to take action on their ideas. In Turkey, before 2010, there were only six active startup accelerator programs; by the end of 2019, it had increased 8-fold to 57, according to a report by the Presidency of the Republic of Turkey Investment Office. Following the Peak Games unicorn, more startups and entrepreneurs became involved in the ecosystem but funding has always been a problem, according to Hakan Yildiz, Founder of Global Markets Turkey, the parent company of the fonbulucu.com platform.
Along with establishing Turkey’s first share-based crowd-funding platform, Yildiz also opened the first travel agency in Kayseri. His initiatives allowed him to work in public duty, in privatization administration between 2003 and 2009 and in the Ministry of Energy and Natural Resources between 2009 and 2016. In 2016, Yildiz established Global Markets Turkey at Ankara Teknopark, primarily focusing on finance and e-commerce.
One of the projects of the company was fonbulucu.com. “At Teknopark, I saw how expensive and hard it was for startups and entrepreneurs to raise funding and how much funding they needed to develop their projects,” explains Yildiz. Along with the platform, Yildiz and a few partners, including Savas Unsal, previous CEO of Superonline, established an association to work on legislation for crowdfunding in Turkey. The association began to work in 2015 and finally convinced the Capital Markets Board (SPK) to take on the issue. The board published a Communique on Share-Based Crowdfunding in 2017.
INVESTING AS LITTLE AS ONE LIRA
Operating with in-house software that was developed by a team of 12 employees, the platform allows everyone interested in startups to invest in a project with as little as one lira. “It is a platform where everyone can become an investor, create portfolios and become a part of a startup,” Yildiz says. The investment is transferred directly to Istanbul Settlement and Custody Bank, a partner of the company, instead of the platform or the entrepreneurs. Once the campaign for a project is completed, then it is allocated to the project owner. “We take TRY 1,500 listing fee and 5% platform fee from startups because we try to keep the amount as small as possible,” Yildiz explains. Regular investors receive a dividend or exit revenues. Also, the platform limits the amount of individual investment to TRY 20,000.
Startups and individual entrepreneurs need to fulfill a few conditions to be listed on the platform per the legislation, according to Yildiz. The projects need to be focused on production or technology to support the early-stage startups. The projects can launch two campaigns on the platform per year and can demand up to TRY 10.2m funding. The companies need to be five-years-old at most. “We want these companies to be corporations but if an entrepreneur has not established a company yet, then they can still apply and launch campaigns,” Yildiz adds. Also, the startups need to be based in Turkey and have a maximum of TRY 18m in assets.
Eyeing 10 campaigns in 2021
“We are still waiting for our license from SPK but I’m expecting it to happen in a few months and our goal is to complete at least 10 crowdfunding campaigns in 2021,” Hakan Yildiz, Founder of Global Markets Turkey, the parent company of the fonbulucu.com platform, says, adding that the platform also targets TRY 1bn trading volume by the end of 2020. The trading volume of crowd-funding platforms is increasing rapidly around the world, given that over USD 100bn of funding was raised in 2020 through crowdfunding, nearly 10% of which was through share-based crowd-funding. Yildiz believes the main focus should be on the growth of trading volumes of crowdfunding platforms because the higher these platforms’ trading volumes are, the more support they can provide to startups in terms of raising funding for their projects.