14 investors of GBA were right, and now they have a success story to share!
Next to Galata Business Angels, also the statistics are right. The chances of success increase when the founders are around 30, not their first startup and international focus. GBA was the first investor for Insider, in 2013, and today they sold less than half of their shares to Sequoia Capital India multiplying many times their investment. Suddenly we have a real success story in the startup scene, not an M&A, but a multiplier effect during the growth of a startup with a partial exit. Leaving all the other Angel Investors with their mouth open, and surely already considering to move over to GBA now. In the Tour de France the one in Paris with the yellow jersey is always right. Same here. GBA was right although they carry the stamp of a men’s club, despite some powerful women members, slow, and for some even arrogant. A member pays yearly 2.500US while the, around 15, Angel Networks in Turkiye rather try to be a friends club. What’s the difference? For sure the commitment, as paying a membership fee in Turkiye is not common. For free is more the thing while expecting a lot in return. But GBA is right because they are the only and first one to write this kind of success in their reference list. Amin.
As I wanted to understand better what happened I had a long and interesting phone call with Ata Uzunhasan, Managing Director GBA, and we very quickly came to Hande Çilingir, CEO and Co-Founder Insider. I still struggle with Turkish names as I rarely understand the meaning and I was wondering how the Sequoia Capital team would pronounce it. Hande Locksmith would be easier for them and they would, like me, understand the meaning of her name, but it is Çilingir of course. There is no doubt that the success of a fast-growing startup depends on the strength of a team. The CEO in most cases is the bright one, the person who can explain best. No doubt Hande is very important for the team, I saw her in a panel we organised as Stage-Co, “Ladies Share their Stories”, and I could see the glow. The glow that marks passionate and smart people who are building on a road to success.
Ata explained me the road since 2012 when the first talks started between GBA and Socia Plus, the first company name, they later changed into Insider. In my naivety, knowing the cap table from all rounds I thought it would be useful to share this, so potential investors can see how these investor rounds where done and understand that it is possible to create a multiple, in this case in 5 years. In Turkiye we lack this kind of success stories and insides. When I posted this blog a week ago, with all the details, I got feedback from some of the stakeholders that they were not happy with all these details. I discussed this with investors and although everybody agrees that sharing as such is a good thing, it sometimes can harm the reputation or the negotiations of the founders and /or the investors. As I was a founder too many times myself I unpublished my posted and changed the details out of respect for the Insider team. So I will only share what is public, in this case based on Crunchbase and Techcrunch. It will still give you an idea of the rounds and the road to success for early investors. The Series A round was led by 212Ltd, with participation of Wamda Capital and Dogan Holding, followed by 500Startups in Sept 2016. This round was 2.2 million USD, after the Aslonaba round of 700.000 USD and an Angel Round of 200.000 USD by Galata Business Angels, back in 2013. I found this information on Techcrunch , written by Mike Butcher, great source, and an overview of the rounds in Crunchbase. Know that Insider made already money at the first round! Hande and her co-founders had a successful exit from a language school in Fetiye and started with Socia Plus a new startup in the digital world. The first time I heard from Insider, I was not really convinced as what they put forward was offered by many others in the field and from a service and product point of view, I couldn’t distinguish the unique selling point. After the Aslanoba round, Insider went on expanding outside of Turkiye, today active in 13 countries and almost 150 employees. The expansion is quite impressive. In each country, they try to find the first customer, then start the local team. The last round is now concluded by Sequoia Capital India with a Series B, in total 11 million USD. As Hande and the other co-founders didn’t want to dilute they could make a deal that was also very good for the GBA members of the first hour, as they could partly exit with a good multiplier. If you need details, ask GBA :-). Not only the money part is impressive, but also being able to negotiate successfully a deal with one of the biggest VC’s worldwide. In Turkiye we don’t do this every day, playing in the highest startup league. I leave it to smart people to calculate post valuation, but we are talking big money for a company that is 5 years old! You wonder who is Sequoia Capital? Here is some Wikipedia (thanks to VPN) info for you: “The combined current public market value for these companies is over $1.4 trillion, equivalent to 22 percent of Nasdaq. As in 2017, they have exited in 68 IPOs and 203 acquisitions”. That kind of player.
Together with Ata we also discussed the reasons for success. What makes Ata for me very interesting is that he has a very factual background, PWC and TEB, each time in very interesting roles. He has also a creative and entrepreneurial side but later more on that topic. We quickly came to the topic ‘reporting’ and again there Hande shows the way as an example on how to do that. Most investments in Turkiye are done into young startups with young founders with young experience. Young is key here, because young means also self-centred, know-it-all, slightly arrogant. Does that mean the young ones are bad? No. They simply don’t know what to do and how to behave. In my opinion it has a lot to do with the local culture. When I received investment money in Belgium I was more afraid than happy as it also comes with a responsibility. In Turkiye the young people see raising money as their to do and with the money on the bankaccount you don’t hear them anymore. Once the money is gone, panic, and they start raising again. Here we see 2 different approaches by Hande and her team. They see making money, expanding as the key reason why they started the company. Secondly, Hande reports quarterly in detail to the investors, so never a surprise when action needs to be taken, and full trust. It goes as far as Ata stating to the young ones that no reporting means no next round support. GBA also does not emphasise on taking a board seat. Especially in Turkiye this comes with a risk in terms of liability. You can imagine ATA is getting new applications from investors who want to join GBA now and are praising his Quick Due Diligence method. As I said, the guy in the yellow jersey is always right.
Tebrikler, congratz in Turkish, to the GBA team and Insider. This is a great example and a role model we needed in Turkiye. I know Monetise and Yemeksepeti are also great, but M&A. Oh yes. Ata also has a creative side. Working at TEB he had this crazy idea, especially in a bank, the ultimate corporate, to start a band. Like people who sing and make music. He pulled it off, took full responsibility, and after the OK of HR the TEB Band was born and performing. He is not in that band anymore but they continued and will release their second CD. Ata was the proud founder. GBA must support this young talent, talent in Turkiye that also executes with success is rare. Like Hande, the only female co-founder, now the CEO and the face of Insider. In Yellow Jersey. There is always hope, also in Turkiye.
The Press Release you find here.
Patrick Bosteels, co-founder Stage-Co and CoderDojo Turkiye