Scotty started in 2017 with the mission of finding a solution to Istanbul’s traffic problem through motorcycles and later launched food and package delivery verticals. The company reached 3 million trips in its first 18 months of operations and raised $Ms from 30 different investors.
Istanbul is a good starting point, but expansion is a must
The dense population and ever-growing traffic problem make Istanbul an ideal first market for Scotty where it can scale up to a sizeable volume. Short distances that take up to 1-2 hours to travel in busy rush hours, only take as low as 15 minutes with Scotty. This helped Scotty grew virally and solidified the value proposition on the customer side.
Scotty’s total addressable market size in Turkey is about $5B. When compared to Gojek’s $10B valuation, the company with a similar model in Indonesia, this big potential is well justified. The 1.4M taxi rides every day in Turkey shreds more light into the opportunity, but the obvious question is the regulatory hurdles in Turkey.
Positioned as a non-competing alternative to taxis
The regulatory problems in Turkey pushed large global ride-sharing companies Careem and Uber to be pushed out of the market. Working closely with the Uber team while they were entering the Turkish market, the regulatory struggles did not demotivate Tarkan while starting Scotty. Positioned as an alternative to taxis, Scotty’s main mission was to reduce the traffic jams that are deeply affecting almost everyone in Istanbul.
“We are only an alternative for one-person journeys. This differentiates us from usual taxi customers while also reducing the number of single-person travels in the city” - Tarkan
Bias against motorcycles in society
As Tarkan was just starting Scotty, a lot of people (including myself) had concerns around accident risks and the societal bias against the safety of riding on motorcycles. Scotty ran campaigns to raise the cumulative social awareness and the team delicately chose the drivers that will deliver the rides on the platform.
Out of the 70k driver applications in the first 2 years, Scotty only allowed 10k to enter the platform. Closely monitoring the selection process that included driving tests and equipment control, the team also started the Scotty Academy to increase the driver quality. Along with training, Scotty also developed a smart driving score system and a rating methodology that favors high-quality drivers on the system.
“Accidents can happen with personal vehicles or taxis as well. Our mission at Scotty is to only allow high-quality drivers and further improve them to lower our accident rates to below conventional alternatives.” - Tarkan
Friendship with Justin Kan
Tarkan’s previous startup was a video sharing platform. He entered a pitch competition where Justin was at the jury. Unfortunately, he wasn’t selected amongst the 10 startups that were going to pitch on stage; but considering Justin’s background in Twitch, he insisted. Badgering the organizers, he eventually found a place for himself on stage and had the opportunity to pitch to Justin. Right after the presentation, he invited Justin over for a Turkish breakfast at his place the next day.
Given his family background in jewelry, Tarkan offered Justin to produce his wedding ring in Istanbul and later shipped it to Silicon Valley, right before Justin was planning to propose. #shesaidyes and Tarkan got invited to the wedding in California where he met with a lot of the industry leaders. This wedding led to Tarkan’s first seed round for Scotty.
Endless funding rounds
Scotty had more than 150 investment meetings and was fortunate to raise from 30 investors since the start. Given the cash-intensive business model and the competition on new verticals, like food delivery, Scotty had to raise large sums of capital. The limited sources of capital pushed Tarkan to pursue international investors early on. He targeted investors that either had success investing in companies like Gojek or Ola or regret missing such opportunities - leveraging executing a proven model in a relatively large and untouched market.
“If we close a round on Friday, we open another one on Monday” - Tarkan
Raising tens of millions to date, Scotty will continue raising money and enter new verticals like payment.
Tarkan’s main motivation in raising capital was to further grow and strengthen the team. The night that Zomato shut down its Turkish operations, Tarkan did not sleep and reached out to schedule meetings with almost all of the ex-Zomato employees. Samet Kose, co-founder and current COO of Scotty, had even found a job in Berlin and decided to move. He also had concerns around Scotty solely being a transportation company. But Tarkan wasn’t going to let him just go: “We were always thinking of starting food delivery operations. Let’s build it together from scratch!” Tarkan convinced all the key ex-Zomato employees and this accelerated Scotty’s go-to-market in food delivery.
Tarkan made a similar move while he was building the core Scotty technical team. Hoping to reach an agreement with the ex-Iyzico CTO Hakan and his team, Tarkan decided to leverage their expertise in payments and speeded up Scotty’s entry to mobile payments.
“A founder’s job is to remove obstacles. These obstacles are usually funding or building up the core team. My main motivation in raising consecutive rounds of funding is to better support the team and make sure that they are happy. I spend 50% of my time fundraising, 30% on recruitment and 20% on strategy & regulations. The team takes care of all the rest like the product, marketing, operations, etc... “ - Tarkan