In Turkey no funding round fails on its own

Yesterday I quoted a funding story and wrote that 3 million dollars looks a bit high to an outside eye. The same lines always come with this kind of news. What is it to you, the money is not coming out of your pocket. You always have to run it down, drag it lower. You are jealous.

I have no interest in raising money, and if I did I would have raised it long ago. I sat down with investors many times on the mobile side and in a few of them I got up from the table at the last minute. The reasons I got up were that I did not find the valuation being discussed right, that I wanted to stay independent, and the non-competes put in front of me. And by temperament I do not like working under anyone and reporting to them.

The reason I found it high is not the number itself, it is what comes in return for it. Istanbul based Surge Games raised 3 million dollars in its pre-seed round, and Play Ventures led the round. Their release says they put AI at the centre of their dev and production pipeline and that it speeds up this loop: new mechanic, prototype, test, data, scale or kill. Everyone who has worked in mobile will have thought the same thing when they read that loop, we have been doing this forever. The whole economy of hypercasual was built on top of that loop.

What gets looked at in pre-seed is not what the team shipped but where it came from, and having worked at a game company is not the same as having made a game, while having command of a production pipeline is something else again. When the three do not come together in the same CV the round can still close, but then the price is set on the promise rather than on the result.

I did a similar workflow speed-up myself back in the day. The workflow I had brought hybrid casual game production down from 1 month to 40 hours, it was pre-AI, it came entirely from rebuilding the process, and there was a lot of interest in it at the time. That is why the tables I sat at were high, the workflow and the games with good KPIs that came out of it. Today many companies are already at that point with AI, so speed by itself is no longer a differentiator. What differentiates is what that speed produces.

I do not know the team and I congratulate them for being able to convince an investor. There are people belittling the round and people asking why you gave it to them and not to us, and both are standing in the wrong place. Getting an institutional investor to the table at pre-seed is a job in itself and that team did it. Nobody owes anybody a round, and the fact that they did not give it to you does not make theirs wrong.

What I want to say is this. Every investment that fails affects the next company. When an investor looks at the next Turkish team, the reference in his hand is what the rounds before it brought back.

The news always says the money taken, it never says the equity given. In pre-seed a team usually gives between 10% and 20%, so 3 million dollars means a valuation of at least 15 million, and 30 million if they managed to hold the equity at 10%. That is a serious number for a company six or seven months old. Of course there may be a picture I cannot see from outside, the investor may be looking at soft launch metrics I cannot look at. And I do not think a round led by Play Ventures is going to turn out all that empty underneath.

Worldwide the picture is different. The total money going into the game industry peaked at 20.1 billion dollars in 2021, collapsed to 4.9 billion in 2023, and in the first half of this year alone it was 7 billion, equal to all of 2025. Jared Gibbons at Deconstructor of Fun writes that acquisition multiples have collapsed from 10x revenue to 1.5-3x and that mobile is no longer fundable for new studios, and says gaming VCs have quietly moved out of content and over to tools, platforms and apps. The money is slowly coming back, but it is not coming to the people making games.

And it is not the game itself that sets the price. AlixPartners went through 130 companies and found that the ones with AI closed their first rounds at 2.5 times the valuation of their peers without AI, and in Joost’s survey this week the five biggest rounds of the quarter went to model or tooling companies while the biggest game studio round stopped at 70 million. This is not the first time the label has been priced either, ten years ago no-code game making platforms raised money on the same promise. Crayta closed in 2023, Manticore raised 145 million dollars and did mass layoffs the same year, Buildbox is still running, but all three sold the speed of making games rather than games, and none of them arrived where that money was betting. On top of that they had a product to sell, and in this round there is not even a tool to sell. The pipeline stays in house, so the round is priced on the promise of that pipeline rather than on the games, and the only thing left in your hands is again the games you shipped.

In Turkey the money has kept flowing, relatively. According to Mobidictum’s list the total of announced Turkish game rounds in 2025 is 206 million dollars, and the part of 2026 so far is 113 million. So it has passed 300 million dollars in twenty months, and that is a conservative number, it does not include undisclosed rounds or Laton’s 50 million fund.

None of that is expected to come back in full anyway, venture maths does not work that way. The investor goes in knowing most of them will go to zero and hopes a single company brings the fund back. The problem is that if that single company does not turn up, the door that closes is not just that fund’s door, it is the country’s door.

The biggest reason Turkey’s door is still open is the money that came back in the past. I wrote about that ladder separately the other day, the chain running from Gram to Loom showed investors that money can come out of here. Everyone sitting at the table is really sitting there thanks to that chain.

The valuation being talked about today will come up in front of the next team too. The answer to why are you at this valuation is now looked for here. If it holds, everyone’s ceiling goes up, if it does not, everyone starts a step lower.

The country is a single vertical. According to AppMagic and Gamigion’s report this year, 96.9% of all the revenue of Turkish developers comes from puzzle, while only 28.2% of the games we released in 2025 were puzzle. Arcade is 25.9%, action 18.9%. So it is not that we do not make other genres, it is that no money comes from the other genres we make.

The reason for this concentration is a closed circle. Dream’s five founders came out of Peak, four of Spyke’s five founders came out of Peak, and Ace, Bigger and TaleMonster are tied to the same family tree. People out of the same school grow the same genre. At first glance it is good for the ecosystem because the experience stays in the country and circulates, but it is also what pulls the country into a single vertical. You can call it a cartel, or say it has turned into a mafia, that sounds cooler.

So when an investor says Turkey, what he is really saying is match 3. The good side is that nobody in the world has passed us in that genre. The bad side is that one single weak year for match 3 pulls the whole country’s fundability down, and on top of that the person making games outside that genre pays the same bill.

Where the next hub is has been discussed for a while. The industry press writes Vietnam and the numbers are serious. Vietnamese studios released 27.4k games in 2025 and produced around 5 billion downloads, making them the world’s second largest exporter of mobile game downloads after China. The government declared games one of twelve key cultural industries, set a 1 billion dollar target for 2030 and promised to train 5k developers.

I am not writing this as a threat, but see this, PocketGamer is running a developer mixer in Ho Chi Minh and Mobidictum is doing the same in both Hanoi and Ho Chi Minh. So the publication that keeps Turkey’s funding list is setting up a table there at the same time. Nobody is leaving Turkey, but attention is a portable thing and it is clear what moves it, what the rounds coming out of here bring back.

When you look at it from your own side, ask a single question. Is the money you took or are thinking of taking payment for a result, or payment for a promise. Both are legitimate, but the bill for the second one comes late and you are not the only one paying it.

I am one of the people who most wants another unicorn to come out of this country, because as long as that chain does not break the door stays open.

It is not coming out of your pocket, but it is coming out of the door you are queuing at.