In 2013, Amadeus Capital Partners started down a new path; we raised the Digital Prosperity Fund (DPF), our first emerging market fund. Amadeus has a rich history of finding and backing great entrepreneurs and we decided to take these skills to companies building marketplaces, digital commerce and fintech businesses in growth countries such as Brazil, India and South Africa. But when I mention we have taken our first step into Turkey, I hear, ‘you’re investing where?!’

Turkey is not a ‘turkey’
We’re excited to be backing Barbaros Özbuğutu and Tahsin Isin’s team at iyzico, our first Turkish investment. iyzico is an online payment processing and fintech vendor targeting ecommerce businesses in Turkey and Iran. But before I start building my case for Turkey, let’s get past the front-page news.

Yes, Turkey had a failed military coup d’état and President Erdoğan is pushing to strengthen his power. Yes, there are the awful bombings by terrorists and separatists. These are very serious issues. We do not believe however, that they warrant writing off a whole country and major economy.

80 million Turks, about the same population as Germany, live in a landmass approximately twice its size. It has the world’s 18th largest GDP, just behind Canada and ahead of Australia. Its large population though means it ranks 85th on the per capita GDP scale but still ahead of Brazil and Mexico – other emerging market investor favourites. A sizeable portion of the Turkish public is middle class with easy access to the latest media and gadgets.

Standing out from its peers, Turkey has a sophisticated banking sector with the highest payment card penetration rate in Europe coming close to those of advanced nations like the US and Japan. Add to this its high internet penetration, available to 60% of the population and growing faster than anywhere else in Europe, and you have a great market for new consumer services.


Turkey’s entrepreneurs and exits
Entrepreneurs have built a vibrant ecosystem with supportive angels and early stage funds, with a handful of growth investors like us. There have been some notable exits, chief among them the 2015 acquisition of Yemeksepeti, the food delivery market leader, by Delivery Hero for $589 million. Smaller but no less significant were the 2014 acquisition of Pozitron by Monitise for $100 million and Markafoni by Naspers for $200 million.

These are powerful reasons to look beyond the negative news. But in the end, our decision to invest relies on the same motivation as applies anywhere else – exceptional entrepreneurs chasing a big opportunity. Hence iyzico.

The iyzico story
The iyzico team has built Turkey’s leading online payment processor—essentially the Stripe of Turkey. iyzico has swept away the burden on ecommerce businesses of managing the huge variety of Turkish payment cards, giving them a single integration point and a host of tools to simplify their lives.

Company founders Barbaros and Tahsin come with the perfect background having run fintech businesses in their native Germany before moving to their ancestral home of Turkey to start iyzico.

They have recruited a similarly well experienced and star studded team including Hakan Erdoğan, Orkun Saitoğlu, and İlkay Düzgün to lead technology, sales, and finance respectively. So a big checkbox tick on the team question.

To the market question, there was US$9 billion of processed card volume in 2015 – a 30% year-on-year increase in constant currency terms from 2014. Most this volume was processed by the country’s major banks. Online payment volume is a proxy for online commerce, so in backing iyzico we have placed a meta bet on Turkish online and mobile commerce.

Online commerce is clearly not immune to political strife but the market has already shown itself to be relatively resilient. During the July 2016 coup d’état, card volume dipped versus seasonal expectations but quickly recovered in August to a record high.So a star team going after a large and fast growing market with a well-connected end consumer. Yes, it’s not the most stable environment but the opportunity to back a team of this quality addressing such an open market opportunity is rare. We take these opportunities when they come and work to manage the risks we can’t control. Let’s hope these risks move from the front pages to the history pages but meanwhile, we will remain believers in Turkey’s potential.


Jason Pinto is a Partner with Amadeus Capital Partners.