New fund in the pipeline to expand financing for Turkish entrepreneurs
Türkiye is working to establish an upper fund aimed at channeling more resources into venture capital funds investing in companies engaged in strategic sectors and technology fields, according to Treasury and Finance Minister Mehmet Şimşek.
Şimşek on Wednesday said they had reached the final stages of creating the fund with an initial expected size of $50 million (TL 1.62 billion), projected to increase in the future.
Şimşek had instructed the establishment of such a fund to support entrepreneurs during his tenure as deputy prime minister in 2018. Works resumed after the highly respected policymaker assumed his new role last June.
Highlighting the significance of venture capital, the minister emphasized its role as an alternative financing tool for early and growth-stage firms, particularly those with rapid growth potential in both advanced and developing economies.
The ministry has been actively engaged in introducing new financing methods since 2014 to support the entrepreneurship ecosystem and enhance the capacity and effectiveness of venture capital funds, he told Anadolu Agency (AA).
“In this context, in 2015, for the first time in our country, the Turkish Growth and Innovation Fund was established through the initiative of our ministry in collaboration with the European Investment Fund, and our ministry became an investor by committing 60 million euros ($64.06 million) to this fund, which has a size of 200 million euros,” Şimşek said.
Additionally, Şimşek recalled the collaboration agreement signed in 2018 between the ministry and the Scientific and Technological Research Council of Türkiye (TÜBITAK) for the implementation of the Tech-InvesTR Program, which started direct funding to venture capital funds.
Leverage effect
On the current stage of what he dubbed a new upper fund, to be set up within the framework of the Türkiye Development Fund, the minister said joint works run with the Türkiye Development and Investment Bank have reached the final phase.
“This upper fund will ensure the allocation of resources to venture capital funds that invest in companies operating in strategic sectors and technology fields. The aim is to support venture capital funds investing in sectors prioritized in development plans and policy documents such as the Medium-Term Program,” said Şimşek.
“While the initial size of the fund is projected to be $50 million, the amount could increase with the participation of national and international investors.”
Şimşek assured that the fund would be managed in accordance with international standards and transparency. Annual audits through an independent audit firm will ensure accountability, with the possibility of ministry-conducted supervision if necessary.
Moreover, the minister outlined the anticipated gains upon the fund’s operationalization.
“The aim is for the allocation of resources to indirectly support businesses producing high-value-added goods and services and to promote the widespread dissemination of entrepreneurial culture,” Şimşek said.
“This is expected to create a leverage effect, thereby providing the necessary momentum to the venture capital ecosystem and contributing to our country’s technological development and value-added growth strategy.”
