As long-time backers of early-stage startups and ex-entrepreneurs, the ScaleX team has seen many iterations of startup ecosystems — but we can say definitively that we have never seen a year like this.
The chaos of 2020 stayed with us in 2021. Despite that, it was still one of our very best years ever, especially in terms of investment activity & liquidity. While achieving our investment plan of the year, we managed to raise follow-on rounds for more than a few of our portfolio companies. We are very proud of such a performance in this context!
The global VC industry continued to grow through the year and put 2021 on track for another record-breaking year for venture investment, exit activity, and fundraising, despite mixed macroeconomic signals and a prolonged pandemic. Put it differently, both early and late-stage fundraising was on fire. Funding in only Q3 was around $122B, solidifying Q3 as the biggest quarter in VC investment ever, almost doubling (89%) of last year's numbers.
When it comes to our ecosystem, there’s no doubt about it; 2021 has been an unparalleled year for the Turkish tech ecosystem. The figures for the last quarter have not been clarified yet, but if we look at the first 9 months of 2021, startups received a record $1.4 billion investment in 206 investment rounds in total.
Without further ado, we’ll let the data and the milestones do the talking.
After working from home for the whole of 2020 and in the first half of 2021, we are back in the office this quarter. It’s been brilliant to spend more time together in the office as a team and to see founders face-to-face far more often.
With Başak joining the team full-time and Şafak being promoted to Associate position, 2021 has been a growth year for the ScaleX team.
Başak has only been with us as a full-time analyst for six months, but has had a tremendous impact in that time, supporting the whole team with deal flow as well as managing the marketing activities, helping due diligence processes and contributing to IC discussions — it’s like she has been here for years.
Şafak has been with ScaleX Ventures for almost 5 years, starting as an intern and then joining us full time right after graduation. During his tenure here, Safak has connected ScaleX with multiple future unicorns, and has frequently been recognized for outstanding achievement. It is a great honor for us that he has become an Associate this year and we are confident that this promotion will return to both ScaleX's story and the ecosystem as many successes.
When it comes to investments, it’s been our privilege (and a lot of fun!) to welcome 7 new startups and 10 new founders to the ScaleX fam this year.
Code2 was our first investment in 2021. Founded in 2020 by an ex-YC entrepreneur, Code2 offers a no-code app development platform for citizen developers, which takes care of production, deployment, management, and scaling of applications.
We have witnessed that there’s no escaping the need to digitize in today’s environment. And the need for speed is only increasing. While organizations ramp up tech hiring and optimize their IT organizations for maximum efficiency, we need solutions to digitize more with less coding talent. After seeing this trend and finding a proven founder like Mustafa, investing in Code2 became a no-brainer.
Check out the link to start coding your app.
Another company we announced our investment this year was Upstash. Founded in 2020 by ex-Hazelcast founder, Upstash is a serverless, low latency, and pay-as-you-go database for Redis. We had participated in the seed round of Upstash along with prominent Silicon Valley angel investors such as Naval Ravikant, Founder of AngelList, Mathias Woloski, Founder of Auth0 and Guillermo Rauch, Co- Founder of Vercel.
Recently, we have witnessed a rise in the need to eliminate management of servers, and shift from DevOps to serverless computing. At this point, we invested in Upstash, which sees the gap in the market, provides a performance advantage over its competitors, and has a team that has been dealing with this issue for 10+ years.
Besides the new investments, we produced a data-driven insightful Venture Landscape Report to reveal the latest developments about the global startup and investor ecosystem.
Whether it’s the size of deals, the number of IPOs, or the rise of SPACs, it’s clear that the venture capital industry is changing. The financial aspects of the market as well as the demographics are starting to affect how startups are funded. In this report, we have brought you these VC trends. They're poised to continue to shake up the space over the next few years.
Overall, the pace of startup innovation has been accelerating, with several different technology cycles happening simultaneously: Web3, cloud, crypto, climate, AR/VR, etc. Geographic restrictions are becoming less relevant as more people are working remotely and companies are able to access the best talent globally. This geographic freedom extends to fundraising as well, enabling investors to more easily invest worldwide and startups to more easily raise capital worldwide. As a result, the world of venture capital has been very active and valuations have become frothy.
You can find the full version of the report at this link.
Whilst 2021 has probably been our busiest and most productive year yet, we also found some time to have fun, including a mid-year strategy review and a brilliant offsite where we started laying foundations for the next chapter.
Next year, we are planning to hold a few more off-site-like strategy events with the participation of the founders of our portfolio companies and global operators. We look forward to your suggestions and messages for external participation.
A big thank you to everyone for another year to remember. In 2022, we can’t wait to meet more founders and write their first cheques, and continue supporting our portfolio companies to build the iconic technology companies of tomorrow.
We are wishing you a very happy, healthy and peaceful holiday season. 🎄
Here's to a great 2022!
“The bad news is time flies. The good news is you’re the pilot.” - Michael Altshuler