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SoftBank’s Debut Turkey Deal Draws $1.5 Billion for Trendyol

SoftBank Joins Two Gulf Wealth Funds for Debut Turkey Investment

Trendyol, a Turkish e-commerce company backed by Alibaba Group Holding Ltd., raised $1.5 billion in its latest financing round that included SoftBank Group Corp. and two Gulf wealth funds.

The capital raise, co-led by SoftBank’s Vision Fund 2 and General Atlantic, vaulted the Istanbul-based firm to a $16.5 billion valuation, according to an emailed statement from the company. The announcement confirmed a Bloomberg News report in July on Trendyol’s plans.

Qatar Investment Authority, Abu Dhabi sovereign fund ADQ and Princeville Capital also joined the round. It marked SoftBank’s first investment in Turkey. The company and investors declined to comment on the size of their individual investments and stakes.

“The funding proceeds will support Trendyol’s growth both within Turkey and internationally,” said Demet Mutlu, the company’s founder. “In particular, Trendyol will continue its investment in nationwide infrastructure, technology and logistics, accelerate digitalization of Turkish SMEs.”

The deal is the second investment in the Middle East through SoftBank’s Vision Fund 2, following on from last month’s $415 million fundraising by Dubai-based cloud kitchen startup Kitopi, which took that company’s valuation past $1 billion.

Trendyol has benefited from a surge in online buying in Turkey, which jumped 66% last year, according to the trade ministry. The company’s gross merchandise value, a measure of the products it sells on its platform, has grown by about 20 times in the past three years and is on track to hit $10 billion this year, people familiar with the company said in April.

The firm may sell shares in two years through an initial public offering, the people said at the time.

New Channels

Trendyol will “become a leading player in EMEA and create new export channels for Turkish merchants and manufacturers” with the help of the cash from the investment round, said Evren Ucok, the company’s chairman.

The funding round made Trendyol Turkey’s only “decacorn” with a valuation of more than $10 billion. The company hit $9.4 billion in value earlier this year when its top stakeholder, Alibaba, invested $350 million, according to the country’s commercial registry.

Borsa Istanbul’s most valuable company, steelmaker Eregli Demir ve Celik Fabrikalari AS, has a market capitalization of about $8.4 billion.

Trendyol has created several side businesses that support its main marketplace platform, said Melis Kahya Akar, managing director and head of consumer for EMEA at General Atlantic. “We believe we can add in the growth of other verticals such as financial services and international expansion,” she said in a phone interview.

Tech companies in Turkey have attracted more international investment in the past year, pushing valuations higher. Hepsiburada, Trendyol’s main rival in Turkey, was valued at $3.9 billion in its IPO on Nasdaq earlier in July. Zynga Inc. bought game-maker Peak for $1.8 billion last year, and Getir, a quick grocery delivery app, fetched a $7.6 billion valuation in its latest investment round from private equity firms in June.

Citigroup Inc. is the sole financial adviser and placement agent for Trendyol in the transaction, according to the statement.

Mutlu, a Harvard Business School dropout, founded the company in 2010. Trendyol has become Turkey’s largest e-commerce marketplace platform with 34% of the market, according to Euromonitor data. Hepsiburada controls 11% and n11.com has 8.3%, followed by EBay Inc.’s GittiGidiyor unit with 4.4%.

©2021 Bloomberg L.P.