Responding to a popular request, we are now sharing transcripts of our investor podcast interviews in this new series. The following interview with Cem Sertoglu, Earlybird Venture Capital was recorded in October 2017.
Cem Sertoglu is Partner at Earlybird Venture Capital, based in Turkey. Cem brings the spotlight on Turkey and the Eastern and Central European startup eco-systems.
Sramana Mitra: Tell us about Earlybird. What is the focus of the firm? How big is the fund? What sized investments do you make?
Cem Sertoglu: Earlybird is a European venture capital firm. We have three separate funds under management. I raise and run with my team the Turkey and Central and Eastern Europe fund within Earlybird. It’s a $150 million early-stage tech fund. We only invest in companies connected to Turkey and Central and Eastern Europe.
Sramana Mitra: What size are we talking?
Cem Sertoglu: Being regionally focused, we find ourselves quite flexible about the size and stage. If you look at our first checks to date, they have range from a few hundred thousand dollars all the way $11 million Series B rounds. We tend to be fairly open-minded and stage agnostic but focused on the earlier side of seed, Series A and B.
Sramana Mitra: Talk to us about the trends that you see in your deal flow. In that context, give us a picture of what is happening in Turkey.
Cem Sertoglu: We come from angel investing backgrounds. We are entrepreneurs and professionals. After some experience with our angel portfolios, we ended up raising this fund in 2014. We do have a perspective of having been on the ground for the last decade or so. The changes are fascinating.
First of all, we see that the quality of tech startups in the region is improving. Both in Turkey and Eastern Europe, there is a strong legacy of software engineering education and also some good precedent companies that have emerged from the region. If you’re here, you don’t think of them as Eastern European companies if you hear their names. To their clients, they look like western companies. That’s on purpose.
If you look at the company’s history, you see that a lot of their product development is rooted in the region with their R&D teams and product management still remaining in the region. These are companies like AVG or Avast. The global playbook on how to build a tech company is now much more visible all the way from parities like Silicon Valley to the movie Social Network, and podcasts like yours.
As a young entrepreneur with a dream to build a global company, you now have many more resources at your disposal. We, as investors, are benefiting from this as the quality of the teams that we’re seeing is constantly improving. Another trend that I think we’re seeing is, there’s an increase in companies that are thinking globally from day one.
The confidence of some of these young companies is growing up tremendously. They’re seeing examples of companies like Atlassian out of Australia. The young founders give themselves the license to be much bolder. We’re seeing an improvement in that as well.
Sramana Mitra: Let me observe that the two companies that you cited, Avast and AVG, are both out of Czech Republic. Of course, Skype from Estonia is a much bigger success story. That was an outlier, but it really set the Estonian ecosystem on a great trajectory having gone through that experience. It sounds like Estonia, Czech Republic, and Hungary all fall within the scope of your fund.