Turkiye Development Fund (Türkiye Kalkınma Fonu)

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A public development fund launched in 2019 to accelerate investment in Turkish startups and strategic sectors through direct and fund-of-funds venture capital.
What are the main aims and objectives?

The Turkiye Development Fund (TDF), established by the Development and Investment Bank of Türkiye, aims to mobilize domestic and international investment in high-impact Turkish startups and strategic industries. Its objectives are to scale innovation, bolster export-oriented companies, and address regional and sectoral disparities within Türkiye’s entrepreneurial ecosystem. By bridging gaps in venture funding and catalyzing public-private partnerships, TDF targets the sustainable development of priority sectors such as technology, advanced manufacturing, and renewable energy, working to create both financial and social returns in line with the country’s long-term economic strategy.

How does the program work?

Turkiye Development Fund (TDF) operates through a multi-tiered “umbrella fund” structure composed of sector-specific sub-funds, each tailored to foster innovation and address gaps in the Turkish entrepreneurship landscape. The Fund directly invests in promising startups and small-to-medium enterprises (SMEs) with a focus on those in priority sectors like technology, energy, and regional development. TDF also acts as a fund-of-funds, committing capital to independent venture capital and private equity funds, such as Revo Capital Fund III and Mediterra Capital Private Equity Fund III, thus expanding its reach and impact across the ecosystem.

Public-private partnership is central to TDF’s approach. The Fund receives anchor investment from the Ministry of Treasury and Finance and works with foreign institutional players to boost private sector co-investment. TDF’s regional development sub-funds specifically target underdeveloped provinces, helping to reduce economic disparities and encourage entrepreneurship beyond metropolitan areas. Startups in export-oriented or high-tech fields receive not only financial backing, but also access to TDF’s mentorship, technical assistance, and support networks. Programs like the TÜBİTAK BiGG Fund (implemented jointly with the Scientific and Technological Research Council of Türkiye) extend resources to early-stage, science-driven startups nationwide.

Each investment is assessed using robust environmental, social, and governance (ESG) protocols and must fulfill criteria set by the Impact Management Working Principles (OPIM), ensuring measurable contributions to social outcomes alongside economic growth. The Fund’s selection processes for direct investments emphasize innovation potential, scalability, and sectoral impact. For indirect investments via venture capital and private equity funds, TDF considers fund managers’ track records, strategic fit with the country’s development agenda, and commitment to transparency.

TDF disburses investment capital according to milestones, and conducts regular monitoring and reporting, working closely with portfolio firms to encourage positive spillovers for the wider economy. The umbrella structure gives TDF flexibility to adjust focus and resources in response to emerging national priorities, market shifts, or policy changes. Through this combination of direct and leveraged investments, blended finance, and sectoral targeting, TDF aims to catalyze transformational change in Turkey’s entrepreneurial landscape.

What is the overall cost?

Turkiye Development Fund manages over 4.2 billion Turkish Lira (TRY) in capital, with more than 1.4 billion TRY committed to sub-funds and total managed assets exceeding 1.6 billion TRY (approximately $150 million USD). The Fund is state-anchored via the Ministry of Treasury and Finance, supplemented by international co-investment.

How was it implemented?

The Turkiye Development Fund was launched in 2019 by the Development and Investment Bank of Türkiye in alignment with national economic plans and the Ministry of Treasury and Finance. The design process involved stakeholder consultations with government agencies, international finance organizations, and private sector experts to ensure the Fund could bridge the gap between traditional lending and risk capital for Turkish startups and SMEs. TDF’s structure was established to allow sectoral flexibility, including technology, sustainability, and regional development sub-funds, each managed by teams with expertise in venture capital and private equity.

Initial operations focused on staff recruitment and training. Investment managers with backgrounds in development finance, entrepreneurship, and the VC/PE industry were brought on board and trained in ESG impact measurement and OPIM frameworks. Key advisors and implementers included senior figures from the Ministry of Treasury and Finance and directors of the Development and Investment Bank, such as the CEO and Board members, who continue to oversee milestone decisions.

  • 2019: TDF is officially founded.
  • 2020: Sub-funds are launched, including regional development and technology tracks.
  • 2021–2023: Expansion in direct investments; further cooperation with TÜBİTAK and public-private partners.
  • 2024: Fund size exceeds 4.2 billion TRY; new strategic focus on energy transition and green technology announced.

TDF’s ongoing implementation relies on annual and impact reporting, transparent selection processes, and an evolving investment mandate to adapt to Turkey’s changing economic challenges.

What impact has been measured?

According to it's website, the Turkiye Development Fund has supported 75 companies through its €10 million investment, including both direct support and indirect support via its sub-funds and fund-of-funds structure. 

It has laso invested €3 million in the venture capital fund 212 Regional Fund II. 

No further information about the performance of the fund is currently available. 

CURATED BY

Tom Hancock

Research Associate
Global Entrepreneurship Network
United Kingdom