Namshi features clothing, accessories, and footwear for women, men, and kids from over 550 international and local brands. Like Zappos, the sites offers free shipping and a flexible return policy. The site serves the United Arab Emirates, Saudi Arabia, Qatar, Kuwait, Oman, and Bahrain.

According to a statement issued this morning, Namshi has experienced significant growth in the region and this financing will ramp up operations and support the move to a new, state-of-the-art warehouse and distribution center.

The Internet and e-commerce are exploding in emerging markets around the world. Rocket Internet capitalizes on this momentum by incubating and accelerating clone companies based on popular models, like Amazon, Zappos, and Groupon. Its portfolio includes Asian e-commerce portal Lazada, African online retailers Zando and Jumia, Europe-focused Zalando, and Brazil’s Dafiti.

Summit Partners is an active investor in these of companies and participated in the financing of Lazada, Zando, Jumia, and Dafiti as well as Colombian seller of consumer electronics Linio. Before this round, Namshi raised money from Investment AB Kinnevik, JP Morgan Chase, Blakeney Managament, and Holtzbrink Ventures. JP Morgan also likes startups like these and is an investor in Lazada, Dafiti and Zalando.

These deep pockets combined with Rocket Internet’s vision are a major force bringing e-commerce to the whole world. Next up, perhaps, is an e-commerce portal for Antarctica featuring the latest in extreme cold weather fashion.

Photo credit: Eugene Kaspersky/Flickr

And Facebook is growing rapidly in that part of the world with a population of about 400-500 million people: 29 percent growth in 2012, according to a new infographic from Socialbakers.

The “Arab Spring” popular uprisings in 2011 and 2012 contributed to that growth, according to Socialbakers — particularly in the most politically active countries, Qatar, Libya, and Iraq. Those three countries’s Facebook user numbers have soared in 2012, 115 percent, 86 percent, and 81 percent respectively. Facebook, along with YouTube and Twitter, helped protesters organize and collaborate during the popular uprisings in those countries.

Egypt, the most populous country in the region, grew the most by absolute measures, adding 2.5 million Facebook users.

It’s not profitable growth, at least not comparatively, and not yet: Facebook users in MENA countries are some of the least valuable users as far as advertisers are concerned. But that will likely change over time.

One oddity that I noticed in the infographic: Israel is missing from the map. In a variety of sources that I checked, Israel is included in the MENA countries in some cases but not all. It does seem strange, however, that Palestine, Jordan, Egypt, and Lebanon are shown on the map, but Israel is not.

Here’s all the data, in visual form.

photo credit: jonrawlinson via photopin cc

ISTANBUL – Tantalizing investors and innovators at the crossroads between Europe and the Middle East, Turkey has emerged as an entrepreneurial hub. The past five years prove this, with companies churning out billions of dollars worth of e-commerce, gaming, mobile, and software platforms and products.

Deloitte, an auditing, consulting and financial advisory firm, valued Turkish merger and acquisition deals in the e-commerce space at $29 billion in 2010. When VentureBeat reported on the Turkish e-commerce scene last year, we reported that the market accounted for $16.3 billion in revenue for all of 2010. Since then it’s grown even further: Turkish e-commerce market was $19.7 billion for 2011, and through September, it accounts for $17.7 billion this year.

Yet the breakthrough many in Turkey’s entrepreneurship space are waiting for seems distant. Many in the private sector, particularly investors, worry that even though there are many bright and promising Turkish entrepreneurs, there aren’t enough venture capitalists to back them. Indeed, venture capital in Turkey sits on a razor’s edge, with only a handful of funds available for thousands of startups. The next few years will determine whether that edge cuts lucrative returns to solidify Turkey’s place as an innovation hub or whether it bleeds dry, rendering the county an eternal emerging market.

Impatient capital

Last year venture capital godfather Kleiner Perkins, along with Tiger Global, injected a surge of optimism into the Turkish startup scene when it invested a combined 26 million into Trendyol, a Turkish version of Gilt Groupe, an online flash sales site. Other investments by Amazon, eBay, and Intel Capital into several e-commerce sites — online flower and chocolate marketer Ciceksepeti, online auction clone GittiGidiyor, and daily deals namesake Gruponya — has fueled the sentiment that Turkish venture capital has arrived. But as with any venture capital investment that must wait out the possibility of successful exits, only time will tell. Time is exactly what has many worried.

The Turkish economy, which has grown at an average between 5 percent to 7 percent over the past five years, is slowing down. The International Monetary Fund expects the country to grow by 2.3 percent in 2012, a dramatic drop from the 8.5 percent it grew last year. Turks want returns today, which is why e-commerce clones dominate much of the country’s startup scene. Online copycats have a low barrier to entry, have already demonstrated proof of concept, and can be easily “flipped.” Therein lies the danger, as Cem Sertoglu, an Istanbul-based venture capital partner with Earlybird Ventures, points out.

“E-commerce is cheap to start but expensive to keep up because once it gets going it requires a lot of backend operations and logistics. Building a website is easy. Getting the product out is costly,” Sertoglu says. He notes that it takes an average of $25 million to bring an e-commerce company to full scale. That is why, he notes, it is sometimes the “big established retailers” such as Macy’s and Nordstrom that dominate the online market, not the “upstart” flash-sales sites or pure play ventures.

Despite having “a strong payments system,” a sophisticated banking structure, and a credit card penetration rate of 62 percent, Sertoglu is skeptical that many of Turkey’s e-commerce platforms will succeed against eventual entrants who hold strong supply-chain positions. However, noting that “the number of people who have ever completed a commercial transaction online in Turkey is around 5 million, a mere 10 percent of Internet users,” he remains, “overall bullish” on Turkish entrepreneurship and, thereby, Turkish venture capital, noting that even if some e-commerce companies fail, the Turkish tech scene is strong and promising, especially with a highly educated talent pool and reverse brain drain coming back to the country.

Jose Romano, an investor with the European Investment Fund (EIF) and the head of the Istanbul Venture Capital Initiative (IVCI), agrees. He says that e-commerce is not where “the true potential of Turkey lies.” He is more interested in “catalyzing” what he calls the “third generation” of business models that take advantage of technology transfers from universities and that have been “built locally and can expand in the region and globally.”

Uncharted territory

Turkish e-commerce showed its first visible signs of distress in August when the German-based tech “clone factory” that reproduces successful Internet sites in many countries, Rocket Internet, shut down its 400-person operation in Istanbul.

Turkey has seen less obvious indications as well. Skype cofounder Niklas Zennstrom last year made Istanbul the European headquarters for his venture arm, Atomoco. It has not made a single investment in a Turkish enterprise, choosing to act as a base for its existing portfolio companies such as Fab, Rovio, and Wrapp that are interested in launching in Turkey.

While other marquee VCs have shown interest in rolling out a presence in Istanbul, including Accel Partners and Intel Capital, they have not made a lot of active investments here. Back in 2010, a former Silicon Valley hand and major player in Turkish angel investing told me he thought all of this was “tire-kicking.”

“Quite a bit are interested in the (Turkish) Internet business but most of them are afraid of making investments,” this investor told me.

So too are banks who have hesitated to extend capital to small and medium businesses Larger, more established family conglomerates have avoided taking on equity, refusing to yield their corporate governance to outsiders. The result has been stunted Turkish capital markets and deal flow.

Turkish investors and entrepreneurs have no sense of how venture capital investments end. We’ve seen a few exits from angel investments in Turkey, but few of any serious significance.

“We’re seeing the first chunks of wealth made from the Internet,” says Earlybird’s Sertoglu, who himself saw returns from angel investments he made in Yemeksepeti.com. “But no one has made it really rich.”

Despite having a capital markets board that oversees the Istanbul stock market, investment banking and private equity, the lack of laws regulating venture capital and outlining tax incentives for investors in Turkey only fuels investors’ fear.

Nonetheless, venture capital has managed to lay down roots in Anatolia.

Sowing VC seeds

The Turkish government has, for the past decade, extended credits to small business owners and awarded research and development grants for technology projects with the support of the World Bank.

The global financial body helped to establish the independent Turkish Technology Development Foundation (TTGV) in 1991. Though headquartered in the Turkish capital, Ankara, TTGV’s mission has been to support “technological innovation activities in Turkey.” It has provided $300 million to 950, largely R&D projects, carried out by 800 companies. It also contributed to the establishment of investment firms, Is Girisim and Turkven, both of which launched in 2000. Though largely focused on private equity for established companies in need of later stage growth capital, Is Girisim and Turkven have made combined investments over $3.5 billion, in predominately larger buyouts of brick-and-mortar companies. While both are on their third funding rounds, neither has yielded significant returns.

What they have done, however, is create a precedent for others to start funds. In 2000, Access Turkey Capital Group established a venture arm, iLabs. The Istanbul Venture Capital Initiative (IVCI), a EUR 160 million fund of funds launched in 2007.

IVCI director Jose Romano describes it as being a “catalyst to advance the development of the [Turkish VC] industry.” It has inspired a number of largely European and some Turkish investors to set up investment funds. IVCI has not given any money to any venture capital firm.

212 Capital Partners is the latest risk-taker to dive into the Turkish entrepreneurship. Launched this year with a first round fund raised among Turks totaling $30 million, it is eyeing early stage investments in tech startups in e-commerce, gaming, and software applications.

“What we’re trying to do is more entrepreneur-friendly,” says Ali Karabey, a general partner at 212. His idea of entrepreneur friendly is “providing equity where there is no debt” and transforming the Turkish entrepreneurial landscape that, as Karabey describes, is made up of either small firms that rarely scale or large conglomerates that dominate industry verticals. He and partner Numan Numan are trying to mitigate risk and jumpstart deal flow, which is woefully absent in Turkey.

“The risk appetite of investors [in Turkey],” says 212 backer Emre Kurttepeli, “is not one you’d find in Silicon Valley.” In Silicon Valley, he notes, “you have a certain amount of money that gets dispersed into anywhere between 50 to 100 investments and maybe five of them makes a return.” In Turkey, investors are all about collateral and hard numbers. Early stage and seed funding that rely on projected valuations is an uncomfortable concept for these financiers already frustrated with a valuation and due diligence process that depends on weak accounting and auditing practices. It is not uncommon for a Turkish company to keep up to three sets of books.

Projected valuations are tricky and have become a controversial topic in the Turkish startup scene. “The Turkish market has become a bit frothy,” Pamir Gelenbe, an investor with Belgian-based Hummingbird Ventures, recently said in an interview. “Frothy meaning the valuations are starting to creep to unreasonable levels.” He notes that he and his colleagues “find it more difficult to find attractive deals from a valuation stand point.” Another venture capitalist, who asked to stay anonymous, echoed the same point, noting that Turkish entrepreneurs are overvaluing their companies.

Jose Romano chalks this up to the “hype” in the Turkish market. “There have been successful experiences of very strong individuals raising large funds, so many people think this is normal. Just because the economy is doing well and Turkey is in the emerging-country pot, they try to do the same,” he says. Romano is split on the advantages and disadvantages of this. He says it is a disadvantage “because these things take time and many people will be disappointed with the high expectations that have been raised with no results in the short-term.”

“It is an advantage because it brings forward the concept of entrepreneurship, more discussion, more talent, more people coming in from abroad to share experiences, and more money looking for deals,” Romano says.

Going big

Everyone agrees that there is plenty of money in Turkey. The challenge is to couple it with risk. Romano says that one thing that the Turkish VC landscape needs is “strong local limited partners.”

212’s Ali Karabey agrees. “The future of venture capital is on us,” he says and then pausing for a moment. “Big things will develop here. They will be so, so big that we’ll forget about all the problems that we had before starting.”

Photo credit: chrisschuepp via photopin

In the last presidential foreign policy debate, Republican candidate Mitt Romney used the word “tumult” five times when discussing the Middle East. Employment in the region, on the other hand, was mentioned only once, sandwiched between President Obama’s guarantee of preserving Israel’s security and a non-sequitur on the US education system.

While there is no doubt that the civil war in Syria and the threat of a nuclear Iran present serious challenges for the region’s future, both candidates’ presentation of the Middle East as a violent and unstable monolith ignores a remarkable and important recent trend: the emergence of a thriving Arab tech startup scene.

Given the region’s difficulties with unemployment, it will be important for new, home-grown industries to develop and create jobs. Ultimately, this growth is an important determinate of long-term stability.

So, who is actually moving toward growing that industry? Some of the tech innovators laying the groundwork for this movement include:

Maktoob is an Internet services company founded in Jordan in 1998 and acquired by Yahoo in 2009 that serves as the granddaddy of the region’s tech industry.

Oasis 500 is a Jordanian incubator that includes trains, mentors, and invests in promising startups based on the Y-Combinator model from Silicon Valley. Oasis 500 has a portfolio of over 50 companies, from a healthcare-focused network connecting international patients to medical treatment in Jordan to a Ticketmaster-like events service for the Middle East.

Flat6Labs in Egypt is an incubator with a similar concept to Oasis 500 showing the incubator model can work even in politically uncertain environments. Flat6Labs’ companies include a job recruitment network that connects talent to opportunities based on online social connections.

Networking tech giant Cisco has also identified Palestine as a growth opportunity for high tech industry development. It brings together a coalition of companies and government agencies to lay the foundation for the West Bank as an outsourcing hub for Tel Aviv’s tech boom next door. Cisco now outsources a significant portion of work from its Israeli office to Palestine. (Full disclosure: my company Mission Measurement worked with Cisco on this project.)

Wamda, based in the UAE, is a platform for supporting entrepreneurs across the region through localized content, an investment fund, and supporting startup events from Turkey to the Gaza Strip.

These represent just a few examples of the region’s exploding startup scene and this tech acumen is beginning to raise eyebrows internationally. This past July, Silicon Valley tech accelerator 500 Startups invested in its first Middle Eastern company Jeeran, a Yelp-like review portal for the Middle East.

Certainly our future president should focus on the major current geopolitical threats in the Middle East. But we should also support the region’s young, but fast-growing tech industry through targeted aid and technical assistance. Perhaps one day an innovative startup will even create an app to help perplexed presidential candidates locate potential enemies on a map.

Matt Guttentag is a consultant with Mission Measurement, a strategy consulting firm that helps companies, non-profits, and government agencies measure and increase their social impact. He is a regular contributor on international development and innovation to a forthcoming blog in the Chronicle of Philanthropy. He spent two years living and working in Jordan.

Presidential debate image via don relyea/Flickr

A new piece of malware called Madi is spreading in the Middle East, and it has a number of the same characteristics as the Flame virus — known to be a major step in cyber-espionage.

The year-old malware comes in the form of a phishing email, which social engineers, or dupes, unsuspecting recipients into opening an attachment. Once open, the malware installs on your system and a real Word document or PowerPoint presentation pops up to make the viewer believe the attachment was legitimate. In one of these cases, the Word document showed an article titled, “Israel’s Secret Iran Attack Plan: Electronic Warfare” by The Daily Beast. Another attachment opened a PowerPoint file (see image above) with “serene images.” The malware in this case was executed on the victim’s system as they paged through the presentation.

The malware is named Madi after the text file it downloads (mahdi.txt) and a number of other places the name is found within the virus. “Mahdi,” as Seculert points out, is a word referencing the savior in Islamic tradition.

Seculert observed the malware’s transmissions to the command and control servers, which occasionally communicated using Farsi. The command and control servers were based in Canada, though Seculert traced early transmissions from the virus back to an original server in Iran.

Madi is capable of keylogging, recording audio, taking screenshots when a communications application (such as IM) is open, and harvesting other types of data from the infected computer. This is very similar to the recently popularized Flame virus. Flame was discovered by Kaspersky Lab, a Russian security analyst firm that is also working with Seculert on Madi. Flame, on the other hand, has already been touted as one of the major pieces of malware to be afraid of today, showing what cyber-espionage can really do.

Kaspersky reports that Madi targets Middle Eastern government entities, “critical infrastructure engineering firms,” financial institutions, and places of research.

Kaspersky is coming out with a second profile of what the malware can do. We will be on watch for any developments.

Image via Kaspersky Lab

Update: The United Nations is sending out a warning to member countries about cyberwar tool Flame.

Iran has confirmed the presence of a new and highly complex piece of malware targeted at Middle Eastern countries. The virus, called Flame, is said to be as worrisome as Stuxnet, which plagued Iranian nuclear systems in 2010.

“This malware is a platform which is capable of receiving and installing various modules for different goals,” Iran’s CERTCC said in a blog post. “The research on these samples implies that the recent incidents of mass data loss in Iran could be the outcome of some installed module of this threat.”

Iran says that it has created an anti-virus tool that can detect Flame, as well as a removal tool, which is being distributed.

The New York Times is reporting that this virus has hit high-ranking Iranian officials. Russian security company Kaspersky Lab first unveiled the virus yesterday, saying it was one of the most complex cyberwar tools it has ever seen. It may have been running unchecked for at least two years, and was attacking a number of household computers around the Middle East. The firm found Flame while researching another virus called Viper, which was deleting hard drives in the Middle East and recently caused Iran to shut down Internet access to its oil infrastructure.

The United Nations is sending out a warning about Flame to its member countries agreeing that it may be a state-sponsored attack, according to news site Aljazeera.

“This is the most serious [cyber] warning we have ever put out,” said UN cyber security coordinator Marco Obiso, cyber security told Aljazeera.

Flame has the ability to turn on a computer’s microphone and record audio of conversations happening around the computer. It can listen for when you open up “interesting” communications programs, such as an instant message box, and take screenshots to record the conversation. It can also watch for your keystrokes, and listen in on your network, all the while sending this information back to its many command and control servers.

Both Iran’s CERT and Kaspersky note that it is similar to Stuxnet, a state-sponsored virus that was used to attack infrastructure that provided fuel to Iran’s nuclear program. Flame does not attack these types of systems, or SCADA systems. However, Kaspersky believes that like Stuxnet, Flame is a state-sponsored attack, and according to the New York Times, Israel may be hinting its involvement.

“Anyone who sees the Iranian threat as a significant threat, it’s reasonable that he will take various steps, including these, to harm it,” said Moshe Yaalon, Israel’s vice prime minister and strategic affairs minister, on Army Radio Tuesday. “Israel was blessed as being a country rich with high-tech, these tools that we take pride in open up all kinds of opportunities for us.”

via The New York Times; Flame image via Shutterstock

An extremely complex virus infecting computers in the Middle East called Flame was made public today. It’s being likened to the Stuxnet virus, which attacked Iranian nuclear systems in 2010.

“Flame can easily be described as one of the most complex threats ever discovered. It’s big and incredibly sophisticated,” said Alexander Gostev, Kaspersky Lab’s head of global research and analysis in a blog post. “It pretty much redefines the notion of cyberwar and cyberespionage.”

Kaspersky Lab, a Russian security research team, made light of the extensive virus today, saying it may have run unchecked since 2010 and continues to be developed today. Flame is a Trojan, but it’s point of entry is unknown for the time being. Once in, the virus unpacks 20 modules, each with a different tool. Types of tools include a screen capturing tool, which listens for when an “interesting” app is opened — such as an instant message box — and then takes a screen shot to record your conversation. Another turns on your computer’s microphone and records conversations happening in the room, within the mic’s audio reach. It can also watch and record what your type, sniff network traffic and more, sending all the information to the virus creator’s several command and control servers.

Flame is compared to Stuxnet because of its ties to the Middle East — some of the top countries it is targeting are Iran, Lebanon, Syria, and Israel — its complexity, and because researchers believe this is a state-sponsored attack. Researchers also note that Flame “is not designed to steal money from bank accounts,” and is too complex to be developed by hacktivists, who usually use less intensive attacks such as distributed denial of service attacks.

“It looks like the creators of Flame are simply looking for any kind of intelligence — e-mails, documents, messages, discussions inside sensitive locations, pretty much everything,” said Gostev in the blog post. “We have not seen any specific signs indicating a particular target such as the energy industry — making us believe it’s a complete attack toolkit designed for general cyber-espionage purposes.”

Stuxnet, which attacked Iran’s nuclear power infrastructure in 2010 was believed to be a government project, aimed at damaging infrastructure that may have been related to a nuclear weapons program. It does not look like Flame is attacking these systems, called SCADA systems, though it has the capacity to. The virus is also around 20 times larger than Stuxnet, installing at 20 megabytes, and was probably created by different parties.

Stuxnet and its recently discovered sister Duqu were built on the Tilded platform and are said to have three other siblings in the wild. Flame was not, however, built on this platform, according to Kaspersky, and is thus not a sibling.

Kaspersky Lab found the worm while digging around for more information about the Wiper virus — another piece of malware aimed at the Middle East. In this case, Wiper, also known as Viper, would infect a system and delete any number of files from it, wiping out anything that came in its path. At the time, Wiper infected Iran’s Oil Ministry, deleted whole hard drives within the ministry, and eventually caused it to shut down Internet access to all of its oil facilities and rigs.

Flame image via Shutterstock

Peak Games, a maker of social games in Turkey, is acquiring Saudi Arabia’s Kammelna Games to expand its presence in the fast-growing social game market in the Middle East.

With more than 20 million monthly active users, Peak Games says it has become one of the top four social game companies in the world in the past 14 months, mainly on the strength of its games that are tailored for various countries and ethnic groups in the Middle East, North Africa, and Turkey. Istanbul-based Peak Games wants to become the leader for online social games in the region, said Rina Onur, chief strategy officer of Peak Games, in an interview.

“We have been expanding and hiring aggressively,” Onur said. “Kammelna is a great fit for us because they create culturally relevant games that are social and multiplayer in nature.”

While other game makers often pay lip service to localizing their games for the Middle East, Peak Games goes far beyond simply translating games into Arabic. Peak Games has Zynga-like content such as Happy Farm, which has 2.2 million daily active users. That means the game is the second-most popular social farm game in the world in a region with more than 400 million consumers. The region already has 65 million Facebook members.

But it also has multiplayer titles such as Okey (pictured at top), Okey Plus and other titles that are culturally relevant because they are based on traditional regional board games.

With Kammelna, the company gains new executive leadership, local talent, a new studio and some hugely popular games. One of Kammelna’s popular games is Baloot, based on a popular regional card game.

Michael Pachter, an analyst at Wedbush Securities, says that Peak Games is exploiting a first-mover advantage in delivering culturally relevant games in the region. The result is one of the highest levels of user engagement and average revenue per user in the world, Pachter said.

The Middle East has been in the midst of turmoil as a result of the Arab Spring revolt and its aftermath. But you would never know it, based on the games that Peak Games is creating. Onur said that her company is not making political games. Clearly, the unspoken truth is that doing so would get the company in a lot of hot water with local governments. But Onur said that the company’s developers are simply focused on making casual and hardcore games that they believe will be fun to play.

“We are not very interested in political games,” Onur said. “We just want to do what we know best.”

With Kammelna, Peak Games will continue to launch more free-to-play multiplayer online games that are based on traditional Arabic board and card games. Peak Games is run by chief executive Sidar Sahin.

Kammelna was founded by Essam Alzamel, who will continue to run the studio in Damman, Saudi Arabia, where more than two-thirds of the Internet users play games online. On average, Kammelna’s users play more than one hour per play session. Peak Games already has studios and offices in Istanbul, Ankara, Barcelona, Berlin, San Francisco and Amman Jordan.

Peak Games also recently acquired Umaykut and Erlikhan game studios. The company is funded by Earlybird Venture Capital, Hummingbird Ventures, and serial business angel Evren Ucok. Peak Games has 150 employees and Kammelna has 30.

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I saw some great technology, but one consistent weakness was on the marketing side. Many Turkish entrepreneurs are so focused on building their product (a good thing!) that they often give short shrift to how they present or market themselves. Many of them are still in incubation phase, so we got merely sneak peeks at what they’re doing.

One thing is for sure: It’s a great time to be launching an e-commerce startup in Turkey (see my accompanying piece).

I also met with at least ten other start-ups while I was in Istanbul, outside of the 4iX event. My hope is to invite at least three companies overall to launch their products at Demo, our big global launchpad event in April). Thanks to BootCamp Ventures, which helped organize the event, and paid my way to go there.

Following are the four most interesting companies I saw of the 20 that pitched officially at the event.

Emlakjet — A marketplace for real estate buying and selling. Remarkably, there is no dominant Turkish company doing this, in another sign of how nascent the Turkish market is. Founder Emrah Yuce comes across as savvy. The site is producing articles about real estate too, to help drive SEO.

Efiyat — This company provides sales leads for ecommerce sites and helps consumers shop by giving them better information. It offers price recommendations for consumers for just about any product they want. We’ve seen a lot of such companies in the U.S., and there are three players bigger than Efiyat in Turkey already doing this. But Efiyat’s focus on creating a massive database, comprehensive product reviews, videos, rating schemes, along with web spidering technology, seems convincing.

Istanbul R&D — This company has a pretty amazing claim to have devised a new kind of wind power technology.  The company has designed an early prototype that uses huge sails, instead of the massive propellers you find on conventional wind turbines. The entrepreneur, Fatih Yildiz, said it promised to be cheaper and more efficient, and could store more energy, than conventional turbines. The entrepreneur seemed vague under questioning about the technology, so while intriguing, investors will have to go a lot deeper before giving him the $100 million or so he says he needs to bring this to global scale. The company says it can generate power from wind speeds under 3 m/s, and can reserve energy in a way that offers uninterrupted power production for several days. (More here and here).

Hazelcast — This company presented convincing evidence that it has built some cool database memory technology that can serve gaming, finance and other large-data consuming companies. The companies need to perform superfast queries (often on terabytes of data), and Hazel cast makes it easier for them to do that. It offers a NoSql, clustered, distributed cache technology, and boasts several major customers after 18 months of development, including Mozilla. It competes against Oracle, IBM, Terracotta, Infinispan and Gigaspaces, among others. It’s pushing an open source model, and wants to sell security and elastic memory services to enterprise customers to make money.

Here are the rest of the companies that pitched. Many of them are also promising, but need more baking.

Armador has a cool app depicting the tourists sites of Turkey, including the country’s lovely mosques. The company says it is the only deal provider operating in the tourism vertical. Turkey is more significant as a tourist destination than I realized: 7th most popular in the world, and 9th in terms of revenue. The app, called “Mytourkey,” is for all local and international tourists of Turkey. It plans to have a field presence at all major tourist attractions, due to its partnership with city administrators. I really liked the rich visuals of the company’s applications (I saw the beta versions, it’s on the iPhone, but not yet released on Android) as I visited the Hagia Sofia mosque area in downtown Istabul.

Bilgi Kurdu has created a messaging platform, called “Informmatic” for large organizations such as banks, retailers, holdings, enterprises doing both B2B & B2C businesses. It allows sending instant information to employees & customers independent of email or instant messaging. Using Informmatic, companies save time by sending the right information to the right target audience at real or scheduled times. They also share, within the message, streaming videos, music, images, text files like word, excel or pdf, animations, as well as applications like e-surveys.

Ceviriofisi (means “Translation Office” in Turkish), and says it provides a high-quality, fast, 24/7 professional translation service using a powerful instant pricing engine along with the easiest checkout procedure within a competitive pricing scheme.

Gomob  says it is Turkey’s first mobile location based deals and advertisement platform. Gomob will reach SMEs via a partner distribution channel network.

Gruppal.com aims to become a leading daily deal site in Turkey. It publishes the best daily deals on different categories from various cities in Turkey. It focused on local business owners, to give them an easy and cost-effective marketing tool to attract new and loyal customers. More than 48,000 deals have been sold since Gruppal was founded, and the company says members have saved $4.5M. After just a few months, and no backing, the company said it is making $140,000 a month, with 20 percent margins. This is great, but the company wasn’t clear how it plans to offer long-term value, or how it is different from the other deal sites already larger than it is (see my note about how Turkey is very bubbly).

InfoDif — InfoDif aims to provide image processing services to companies who have expertise in their respective fields but require image processing/video analysis capabilities. The company develops software frameworks rather than end-products. InfoDif targets software development companies and system integrators who do not possess image processing capabilities.

Inomera offers a cloud based self-service platform for creating and deploying mobile and web 2.0 services. The PaaS platform provides services and tools for developing, deplyong, and monetizing content and social media.

Mappiness — Mappiness enables users to score their happiness on a 1 to 10 scale. Users relate their own happiness to fiends, places, products, services, events, etc. Data is analyzed to enable users to understand their own happiness trends and triggers. Moreover, users can track friends’ happiness and compare it with world trends. Mappiness aims to become the largest active-users community, measuring global happiness in real-time. Mappiness says it “will have the most reliable answer to a large number of profitable questions.”

Mobilhediyem — MobilHediyem is an instant gifting service for consumers and corporations that delivers physical gifts (such as pizza) in real time without needing a delivery address using text messages. provides a service to both senders and merchant. Sender pays a service fee and merchant pays a sales commission. Orders paid for and not delivered provide additional revenues. MobilHediyem handles payment processing for credit cards and mobile payments.

Montagraph is a free online platform created to allow users to share photographs, photo effects and montages. With the company’s proprietary image editing tools, users can create and share photo templates online. Special features include face recognition capabilities, drag and drop, animation, geolocation-aware technology to make photo effects easiers and user-friendly for the masses.

ThirdCultured is an online platform that aims to connect individuals who were raised with exposure to multiple cultures and therefore identify with more than one nationality. The company aims to become the leading social network aimed at a specific vertical market defined by multicultural customers.

Tish-o lets users put photos, symbols or text on products such as t-shirts, mug, hoodies, clocks and pillows. All products are produced in Istanbul. Tish-o’s services increase attractiveness of specific products by introducing customization, thereby enhancing the products’ value to customers and capitalizing on sentimental consumption. The company will seek to increase the breadth of products offered in the coming quarters.

Tum Firsatlar aggregates daily deals to display the best offers in one location. Tum Firsatlar aims to help users save money and time, and generates actionable leads to partnered companies at no direct cost. The focus is on user experience, rather than deal acquisition, enabling cash efficiency and allowing the company to provide a highly reviewed platform that will further our market advantage.

Wedecide helps organizations crowdsource ideas using a virtual idea stock market game. Employees, customers and other stakeholders contribute and collaborate to develop products, processes, strategy, improve customer service, and make decisions via a social online idea market game.

Wissdom — Wissdom is a social platform where people with the same or similar issues meet to communicate and share their experiences anonymously. Wissdom.com aims to become the first place you think to go when you face a personal issue.

Wudya produces high-quality, Turkish themed social games. Wudya aims to be one of top three social game developers in Europe by 2014 by understanding what excites game players and creating games that meet those needs.

[Photocredit: Flickr, Kivanc Nis]

Lately, emerging markets’ key focus area has been mobile. Since 2002, mobile penetration has grown 321 percent in developing countries. Meanwhile, it’s only grown 46 percent in developed countries in the same time period.

As the second fastest growing mobile phone market in the world, the Middle East has an essential part in this revolution. Some say that it even presents greater opportunities for revenue than European markets.

Turkey is taking advantage of these opportunities and leading the way for the rest of the Middle East. Located right between Middle East and Europe, Turkey is unifying this dynamic environment with Europe’s high technology.

The first steps towards mobile revolution were taken with the significantly high rate of internet consumption in Turkey. According to the most recent statistics, people in Turkey spends the third-longest amounts of time online in Europe, and it has the largest number of internet users in the Middle East. While worldwide average time spent online is 23.1 hours per week, this number reaches 29.4 hours in Turkey.

Similarly, mobile usage is widespread in this fast-moving country. The number of mobile phone subscribers has increased from 50 million in 2006 to 80 million in 2011, including more than 20 million 3G subscribers.  With the completion of mobile revolution in the country, the overall mobile penetration rate expected to reach 95 percent in 2013, from just 43 percent in 2008.

The high consumption levels indicated by these statistics have gained Turkey significant international attention in the past few years. Well-known corporations such as Vodafone, eBay, Telecom Italia and Intel Capital are only a few of the global tech players that have entered Turkey, and new ones are being added rapidly. In the last year, around $1 billion has been invested in Turkish internet-based companies, ranging from private and group shopping to daily deals.

According to the World Bank, more and more investors are attracted to Turkey due to “a diversified economy, proximity to Europe, integration with European markets, the external anchor of EU accession, and a lengthy track record of solid economic management and structural reform.” For example, the government budget for R&D projects almost tripled in the last two years, enabling advancement in both finance and technology. This rapid and prominent progress in Turkey holds an example for the other countries in the Middle East.

In a more tech-friendly environment, companies are trying to satisfy the expectations of a growing audience. Startups have emerged that are taking advantage of this opportunity. For example, P.I. Works is a Turkish company that provides network optimization products used by voice or data wireless operators to increase the capacity and decrease the operating and capital expenditures for mobile carriers. Another well-establish start-up is the social gaming company, Peak Games, leading the gaming world both in Turkey and the Middle East.

Along with the start-ups that are filling various niche markets, financial companies are also pioneers of the mobile revolution, striving to provide their customers with uninterrupted service at all times.

In emerging markets, two types of mobile banking are dominating the mobile world: mobile banking for those without access to traditional banks (the “unbanked”) and mobile banking as a smartphone service. In the rest of the Middle East, mobile is mainly a way for the financially excluded to perform transactions through peer-to-peer lending or person-to-person payments.

But because of Turkey’s more developed mobile market, the emphasis in this country has been on sophisticated mobile banking solutions for customers of traditional banks. In this fast-paced society, people are looking for convenient ways to perform their banking activities. As of June 2010, Turkey had more than 16 million internet banking users who are processing more than 400,000 financial and non-financial transactions per month.  The majority of the internet banking users are inclined to use or switch to mobile banking due to its speed and flexibility. With a share of 40 percent in the mobile banking market, IsBank is converting more clients to mobile banking every day. Banks like Doha Bank in Qatar are going into smartphone banking, following Turkey’s lead.

In 2007, Turkey’s biggest bank, Isbank, partnered with my company, Pozitron, to create a unique mobile banking platform. With more than 75 different features, the platform Pozitron developed, IsCep, is one of the most sophisticated banking applications in Europe.

Turkey’s local market is getting stronger every day and it is ready to face the international competition. Whether it’s mobile banking, mobile games or other services, Turkey is poised for rapid growth in the mobile sphere. And due to its rather young population, Turkey is extremely responsive to technological innovation. The country’s youth quickly adapts to new technology and uses it on a regular basis, making Turkey one of the front-runners of the mobile revolution.

As Markafoni CEO Sina Afra said, Turkey “is a big domestic market with many young users who love to spend time online. Facebook, Twitter, Friendfeed are heavily used. The Turks spent significant amounts of money online and we all know that this is just the beginning.”

Fatih Isbecer (fatih.isbecer@pozitron.com, @isbecer) founded Pozitron in 2000 as a software development company. Along with the fast growth of the mobile industry, Pozitron shifted its focus to mobile software development since 2006. Currently, Pozitron serves over 40 clients, mainly in the finance, pharmaceutical and telecommunication sectors in Turkey as well as Middle East and Europe.  Isbecer’s success was recognized globally with Endeavor’s “Entrepreneur of the Year Award” in 2007.

Yağmur Aniş and Firat Isbecer contributed to this article.

Top photo: Maistora/Flickr

The Istanbul-based company has also acquired two small game studios in Turkey and now ranks among the top social gaming companies on Facebook, according to AppData. The company’s growth reflects the rapid growth of Facebook and social gaming in markets such as Turkey, the Middle East, North Africa, South America, and Mexico.

Peak Games is expanding by acquiring game studios Umaykut and Erlikhan, which the company described as “talent acquisitions.” It is also going to distribute RockYou’s social games in the Middle East and translate its titles into local languages.

To date, the company’s top internally produced games are TrendKiz and Okey. On Facebook alone, Peak Games has 2.4 million daily active users and 8.9 million monthly active users. Overall, the company says it has 4 million daily active users and 16 million monthly active users, if you count its worldwide presence on social networks. That last number is up 60 percent since May.

“Our goal is to be the dominant provider of games for emerging markets,” said Rina Onur, chief strategy officer at Peak, in an interview.

From Dec. 2010 through June 2011, revenues grew 5,980 percent. During that same time, daily active users and monthly active users tripled. The average session for its games is three hours per user. The company’s most popular game, Okey, based on an old board game, has been played 1.4 billion times to date and has seen 18 million installs.

The funding came from Earlybird Venture Capital, Hummingbird Ventures and an unnamed strategic investor. That brings the total amount raised to date to $19 million.

Sidar Sahin, chief executive and founder, said the company knows how to get users in specific regions and how to monetize them.

The company’s early games were based on traditional Turkish and Arabic card and board games, but now the company has created games that target both hardcore gamers and women and girls. Trendkiz, a fashion and styling game, targets the latter group.

Since Peak Games understands its local markets, it has created a good business localizing popular titles from other publishers.

The growth of Facebook has fueled Peak Games’ business. Turkey is the fourth-largest Facebook market, with more than 30 million users, reaching about 87 percent of the local online population. Over the past six months, the number of users in Turkey has grown by 30 percent. It is forecast to hit 250 million users by 2015 in the Middle East region.

“The growth has been huge in the last six months,” Onur said. “These regions are growing super fast and they are very hungry for games.”.

Peak Games has offices in Istanbul and Ankara, Turkey; Amman, Jordan; Barcelona, Spain; Berlin, Germany; and San Francisco. Peak Games was founded in 2010 and has more than 90 employees. Onur said the company will be on mobile game platforms soon.

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Syria on Friday became the latest country to follow the trend: More than two-thirds of all Syrian networks are unreachable, according to a Renesys blog post.

Al Jazeera confirmed on its Syria liveblog that Internet traffic from the country has flatlined, according to a Google Transparency Report.

Internet cut-offs have occurred during revolutions in Egypt, Bahrain, and Libya. Those countries, along with Syria, have government-controlled internet service providers. Syrian Telecom (officially named “Syrian Telecommunications Establishment”) provides DSL and dial-up services to businesses and individuals. Other providers in the country provide 3G and 3.5G connectivity, but only operate when the government allows it.

The Web shut down comes on a day of intense violence in Syria. Reuters reports that Syrian security forces killed at least 34 protestors in the city of Hama on Friday. The report says forces fired into a group of tens of thousands gathered in the city center of Hama, and “scores” of wounded were taken to a nearby hospital.

Protesters have been marching the streets of Syria every Friday since mid-March to demonstrate against President Bashar al-Assad’s rule. When leaving mosques after noon prayer, protesters have been met by armed security forces and snipers.

Time will tell if the protests will make a significant impact on al-Assad’s regime.

The video below shows a mass protest held in Damascus earlier today: