The Accel 5 “Mantras” of Ecommerce

in Turkey

Philippe Botteri

Webrazzi Summit

October 4th 2012, Istanbul

Disclaimer

2 Accel Partners Confidential

This document has been prepared by Accel Partners Management LLP (hereinafter Accel). Accel

is a limited liability partnership incorporated in England and Wales with registered number

OC303424, having its registered office at 16 St James’s Street, London, SW1A 1ER. Accel is

authorised and regulated by the Financial Services Authority (the "FSA") and is entered on the

FSA register with registration number 222503.

This document is provided for information purposes only and does not constitute an offer or a

recommendation to purchase or sell any security or service. It is not intended for distribution,

publication, or use in any jurisdiction where such distribution, publication, or use would be

unlawful.

This document forms part of a presentation to persons who have been invited to attend such

presentation and must be read and considered in the context of that presentation only.

This document does not contain personalized recommendations or advice and is not intended to

substitute any professional advice on investment in financial products. Before entering into any

transaction, an investor should consider carefully the suitability of a transaction to his/her

particular circumstances and, where necessary, obtain independent professional advice in respect

of risks, as well as any legal, regulatory, credit, tax, and accounting consequences.

This document is the property of Accel and is addressed to its recipient exclusively for their

personal use. It may not be reproduced (in whole or in part), transmitted, modified, or used for any

other purpose without the prior written permission of Accel.

We mean “Global” Track record of 225+ exits

3 Accel Confidential

• Founded in 1983

• $9 billion in capital under management

• Stage agnostic

• Over 500 companies

- 100+ public offerings

- 125+ mergers or sales

• Added-value partner

Key trends we are betting on

Accel Confidential 4

Big Data & Cloud Computing

Gaming

Mobile

Social

Next Generation ecommerce & marketplaces

Emerging Markets (Turkey is next!)

5 Accel Partners Confidential

Turkey is next

Large and fast growing Internet

market, but underpenetrated

Strong Macro Trends

• 2011 GDP growth 8.1%

• GDP per capita grew from $6k in 2001 to $14k in 2011

Good Infrastructure

Attractive Demographics

• 5th European country by internet users (38m)

• Mobile penetration rate of 90%+

• Strong logistics and payments infrastructure

• Very high credit card penetration (45M+)

• 3rd most engaged online audience in Europe (hours spent)

• Extremely social demographics (no. 5 country on Facebook, no. 8 on Twitter)

• Young population (half of the population below 30)

Accel Confidential 6

The Accel Five Mantras of eCommerce in Turkey

“Me too” is not enough

Accel Confidential 7

Source: Forbes

150

70

1 2

Stay Away from the “Clone War”

Number of clones created in Turley

• To be successful, you need to be clearly differentiated:

− Product − Segment − User acquisition

channels

• Competition drives margin down: Gross Margin in Turkey usually ½ of what we see in EU/US for comparable businesses

1

eCommerce is not a cheap journey: be prepared!

Accel Confidential 8

Source: Accel Analysis, Ventur Source, TechCrunch

2

174

104

79 65

45

Successful ecommerce companies have raised $45m+

Institutional capital raised to date, USD

Key drivers of cash consumption:

• Working Capital:

building inventory is costly

• Marketing costs: second or third baskets are usually NOT FREE

Run your business with numbers

Accel Confidential 9

Source: Accel Analysis

3

eCommerce is all about numbers and doing a 100 small things right

Customer metrics

• CAC (Customer Acquisition Cost): by channel, for 1st basket, 2nd basket…

• CLTV (Customer Lifetime Value): revenue - all direct costs – CAC 1st basket – CAC 2nd basket…

Website metrics

• CPC by channel

• Google Quality score

• Conversion rate: ratio visitors/ buyers

• Traffic sources: evolution of traffic by channel, paid vs. non paid…

Financial metrics

• Gross Margin/ Contribution margin

• EBITDA

• Working Capital and Inventory: % of inventory write-off, days payables, % of sales through inventory/consignment, cost of storage by SKU…

• Cash flow

Build your brand by focusing on user experience

Accel Confidential 10

Source: Forbes

4

Stronger Brand

Free Traffic

Lower CAC

Higher Profitability

More Volume

The strength of your brand will define your profitability

Build your brand by providing an outstanding user experience: • Product: choice,

easiness to use, social features…(measured by conversion)

• Service: Fast delivery & responsive customer service

• Payment: Variety of payments and financing options

Mobile will be bigger than you think

Accel Confidential 11

Source: ComScore, IPSOS, Google, Informa, Accel Portfolio

5

Mobile already a significant share of traffic & transactions in EU/US…

Accel Portfolio Examples

• Blablacar: • 15% of transactions booked via

mobile app • 20%+ of trips posted via mobile

app

• US ecommerce: 40%+ of Holiday season traffic coming from tablets

• EU ecommerce: 20%+ of sales coming from mobile app

…and this is just the beginning as smartphone and tablet sales are still soaring!

… and mobile penetration is quite high and growing fast

% of population

~92%

~25%

1 2Mobile phone penetration

Smartphone penetration

Mobile phone penetration expected to be >100% by 2014

Accel 5 “Mantras” for ecommerce in Turkey

1. “Me too” is not enough

2. eCommerce is not a cheap journey: be prepared!

3. Run your business with numbers

4. Build your brand by focusing on user experience

5. Mobile will be bigger than you think

Accel Confidential 12

1

2

3

4

5

Thank you!

Accel Confidential 13

Follow me on Twitter @pbotteri