ISTANBUL -- Turkey's largest e-commerce company, Trendyol, said on Monday it has agreed to raise $1.5 billion in fresh funding from global institutional investors, including SoftBank Vision Fund 2 and General Atlantic, driving up the Alibaba Group unit's valuation to $16.5 billion.
In a statement Trendyol said that the funding makes the online marketplace operator Turkey's first decacorn -- an unlisted company valued at more than $10 billion.
The statement also said that the investment is the first in the country for Japan's SoftBank, an early investor in Alibaba that has also backed South Korean e-commerce leader Coupang .
"As an investor in e-commerce platforms globally, we are excited to partner with Trendyol and look forward to supporting the company's journey as one of EMEA's emerging digital champions," Anthony Doeh, partner for SoftBank Investment Advisers, said in the statement., referring to Europe, the Middle East and Africa.
Demet Suzan Mutlu, Trendyol's founder said that the company will use the proceeds for international expansion while continuing to invest in nationwide infrastructure, technology and logistics and accelerate the digitalization of Turkish small and medium enterprises.
Demet Suzan Mutlu founded Trendyol in 2010 as an online fashion shopping site. (Photo courtesy of Trendyol) Trendyol Chairman Evren Ucok, meanwhile, said the company will seek to become a leading player in the EMEA region's e-commerce market by utilizing young and talented human resources and Turkey's strategic location.
According to investment analytics platform Startups.watch, Trendyol reached a $9.3 billion valuation in March when Alibaba made a $350 million investment, increasing its share in the company to around 87%.
Turkey's e-commerce industry is growing rapidly. According to the trade ministry, the e-commerce market grew 66% in 2020, reaching 226 billion Turkish lira ($26 billion). The number of orders surged 68% to reach nearly 2.3 billion, with retail sales accounting for 64% of the market.
Ministry data also shows that 75% of e-commerce shopping was done on mobile devices. Turkey's Association of E-Commerce Operators expects market size to reach 400 billion lira this year.
Trendyol was founded in 2010 as an online fashion shopping site by Mutlu, who previously worked for Procter & Gamble and Deloitte. Mutlu quit Harvard Business School to establish Trendyol after sensing opportunity at home.
Alibaba acquired more than 80% of Trendyol in 2018 by pouring $728 million into the startup, leaving Mutlu and other top executives to steer the company. The Chinese e-commerce giant has been guiding the startup in how to coax small and medium enterprises onto Trendyol's online marketplace, as well as on strengthening its logistics network and advertising strategy.
In the process, Trendyol has evolved from a fashion-focused website into a giant e-commerce marketplace that sells everything from food and furniture to consumer electronics. It hosts more than 120,000 companies and 40 million products, according to a previous statement by the company. Trendyol projects there will be 330,000 companies on its platform by 2023.
Trendyol more than doubled active users last year to 19.3 million and increased average orders per customer by around 50% to 26.8 in 2020 over last year, as the coronavirus pandemic fueled demand for e-commerce.
On Monday, Trendyol said the company is currently "serving more than 30 million shoppers and delivering more than 1 million packages per day" and has "successfully evolved into a super-app."
It described itself as having a marketplace platform "powered by its own last-mile delivery solution" known as Trendyol Express. It also boasts grocery and food delivery using its courier network Trendyol Go and has a digital wallet, Trendyol Pay, among other services.
The company's gross merchandise value -- a measure of the monetary value of products sold in the marketplace -- increased twentyfold over the last three years and is expected to reach $10 billion this year, according to Bloomberg.
Trendyol's roots as a top fashion e-commerce company founded by a woman have helped it gain a large and loyal customer base, especially among women shoppers, who comprise 60% of its users. According to a poll commissioned by Turkey's Competition Authority, nearly 70% of women favor Trendyol as their top fashion e-commerce site, and close to 60% prefer it for cosmetics and personal care goods.
The company has also pursued international expansion, starting overseas sales of fashion products in 27 European countries from October 2020.
Trendyol is not alone in seeing opportunities in Turkey. Hepsiburada, its top competitor, was valued at $3.9 billion in its July initial public offering -- the first listing by a Turkish company on the Nasdaq. Another major online marketplace player, n11.com -- a joint venture between a subsidiary of South Korea's SK Group and its Turkish partner Dogus Holding -- has applied to local authorities for an IPO in Turkey at the end of May.
According to Euromonitor market data for 2020, Trendyol held more than 33% of Turkey's e-commerce market, while Hepsiburada trailed at 11% and n11.com at 8%. Meanwhile, eBay's gittigidiyor.com ranked fourth at 4.4%. U.S. giant Amazon, which entered the Turkish market right after Trendyol in 2018, had less than 1% of the market, failing to crack the top 5.
Elsewhere, Turkish startup Getir, which pioneered 10-minute delivery, reached a $7.5 billion valuation in June through its latest funding round of $555 million. It has increased in value almost tenfold since January through aggressive funding rounds. The company is rapidly expanding into overseas markets such as London, Paris, Berlin and Amsterdam.
Getir acquired Spanish rival Blok in July, gaining access to Barcelona, Madrid, Milan and other cities. Founder and CEO Nazim Salur said the company aims to tap the U.S. market by the end of the year.
Based on its current valuation trajectory, Getir could become Turkey's second decacorn after Trendyol.