Turkey’s angel investment triples despite economic gloom - FT

Angel investment in Turkey has more than tripled in the past five years despite a drop in foreign investment and currency troubles, the Financial Times reported on Tuesday.

Scientists at Turkey’s Eskişehir Osmangazi University meticulously apply electrode pincers to the bodies of flailing scorpions to extract a few small drops of an almost invaluable liquid. In powdered form, the venom of Arabian fat-tailed scorpions is one of the world’s most expensive materials, costing up to $21,000 per gram, according to FT.

Two years ago a group of angel investors approached Figen Çalışkan, the biologist who runs the university’s scorpion house, and her team about producing antivenom and selling it across the region. Albila, the company Çalışkan now works for, has received $3.8 million in funding from 40 backers, and expects to turn a profit this year.

“We have very encouraging figures,” Akın Kozanoğlu, chairman of Şirket Ortağım, the investment management firm that is backing the project, told FT.

In 2013, Turkey took in 14.7 million euros in angel investment, according to the European Trade Association for Business Angels. In 2017, the figure reached 52.3 million euros, the fifth most in Europe.

Angel Invest Europe
Angel Invest Europe

Elmira Bayrasli, a professor at New York’s Bard College, is encouraged by the growth in science ventures, rather than the e-commerce clones that dominated the Turkish start-up landscape in its early years.

“When you take a look at the top Turkish universities, these schools have really top-class minds and research institutions,” she told FT. “Angel investors are looking and saying: what are these geeks doing? Let’s work with them . . . they are opening up knowhow so that they can help brilliant scientists with great ideas.”

Albila was inspired by two brothers from the southeastern town of Urfa, near Turkey’s border with Syria, who collect scorpions after nightfall using ultra-violet light. Emine Sabancı Kamışlı, a member of one of Turkey’s biggest business families, saw the brothers on television and took the idea of commercialising the venom to Şirket Ortağım. After conducting feasibility studies and pairing up with the lab in Eskisehir, they established Albila, giving the two brothers a stake in the company, said FT.

The venom from the university in Eskişehir goes to a nearby equestrian school where horses owned by Albila are injected with it over a period of months, driving their immune systems to produce antivenom, which the Albila lab turns into a certifiable medical product, said FT.

Despite emerging during tough economic times for Turkey, Albila expects its first vials to hit the market in a few months. The firm secured funding before last year’s fluctuations in the lira, said FT, and now expects to take advantage of the weaker currency, with plans to export 75 percent of its product overseas.

Foreign direct investment into Turkey has slumped, with the country attracting half the amount of FDI in 2017 that it did in 2007, when it drew a record $22 billion, said the FT. Businesses, universities and research institutions are struggling with a brain drain to Europe and North America.

But Kozanoğlu sees a growing entrepreneurial mindset among the country’s young people.

“Twenty or 30 years ago, university students would ask: when I graduate, what company will I work for? Now a good percentage are asking: what sort of business should I be doing?” he told the FT. “This will bring creativity, employment, and other value to the economy. It’s a very important change.”