Istanbul Venture Capital Initative (iVCi)

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The Istanbul Venture Capital Initiative (iVCi) is Turkey's first ever dedicated fund of funds and co-investment program.
What are the main aims and objectives?

The Istanbul Venture Capital Initiative (iVCi) was established with the primary aim of serving as a catalyst for the development of the venture capital and private equity industry in Turkey. Its main objectives include providing access to finance for Turkish companies through investments in independently-managed funds and co-investments. iVCi sought to leverage the European Investment Fund's experience to boost Turkey's venture capital ecosystem and bridge the financing gap between innovative ideas and equity investors. By acting as Turkey's first dedicated fund of funds and co-investment programme, iVCi aimed to encourage the commercialization of research and development activities, foster technology-based entrepreneurship, and ultimately strengthen Turkey's innovation capacity. The initiative also had the vision of positioning Istanbul as a crossroads location for the venture capital industry in South East Europe and Central Asia by the year 2020.

How does the program work?

The Istanbul Venture Capital Initiative (iVCi) operates as a fund of funds and co-investment program. Its primary mechanism is to channel investments into independently managed venture capital and private equity funds, as well as to engage in direct co-investments alongside these funds. By leveraging the expertise of the European Investment Fund (EIF), which acts as its advisor, iVCi has successfully supported the growth of Turkey's venture capital ecosystem.

The initiative works by pooling resources from a mix of public and private investors, including institutions like KOSGEB (Small and Medium Enterprises Development Organization of Turkey), TTGV (Technology Development Foundation of Turkey), the Development Bank of Turkey, Garanti Bank, the National Bank of Greece Group, and EIF. These resources are then allocated to funds that focus on financing small and medium-sized enterprises (SMEs) and innovative ventures across various sectors.

iVCi’s operations emphasize catalyzing additional third-party investments by demonstrating the viability and profitability of venture capital in Turkey. For instance, it has fully committed to 10 portfolio funds and has leveraged over €1.5 billion in third-party capital. Additionally, iVCi has supported regional initiatives like the G43 Anatolian Venture Capital Fund, which targets underdeveloped regions in Turkey, further demonstrating its commitment to inclusive economic development.

What is the overall cost?

iVCi was established as a fund of funds with total commitments amounting to EUR 160 million

How was it implemented?

The Istanbul Venture Capital Initiative (iVCi) was established in November 2007 as Turkey's first dedicated fund of funds and co-investment program. iVCi was formed through a collaborative effort of public and private investors, bringing together a diverse group of stakeholders. The initiative's founding investors included the Small and Medium Enterprises Development Organisation of Turkey (KOSGEB), the Technology Development Foundation of Turkey (TTGV), the Development Bank of Turkey (TKB), Garanti Bank, National Bank of Greece Group (NBG), and the European Investment Fund (EIF).

The substantial capital pool was designed to be invested in independently-managed funds and co-investments, leveraging the European Investment Fund's experience to boost Turkey's venture capital ecosystem. The EIF was appointed as the advisor to iVCi, bringing its expertise in fund management and investment strategies to the initiative.

What impact has been measured?
  • iVCi successfully committed to 10 portfolio funds during its investment period
  • It leveraged over EUR 1.5 billion in third-party capital, significantly amplifying its initial EUR 160 million commitment
  • The initiative mobilized EUR 1.8 billion of additional financing by other investors
What lessons can be learned?

iVCi's success paved the way for subsequent initiatives, such as the Turkish Growth and Innovation Fund. This demonstrates how a well-executed fund of funds can create a foundation for ongoing market development and attract further investment in the ecosystem.

CURATED BY

Siddharth Bannerjee

Researcher, Digital Startups
Nesta
United Kingdom