Featured Article

Inside the weird and quirky world of building a startup behind a wall of tariffs

Getmobil raises $4M to refurbish and resell used phones in Turkey

Comment

Mobile phone repair, closeup
Image Credits: boonchai wedmakawand / Getty Images

Think quick — how much does a top-of-the-line iPhone 15 Pro Max cost? If you said around $1,600, you’d be right, but only if you’re based in the U.S. In Turkey, the same phone will set you back almost $3,000. That gap introduces a fantastic opportunity for arbitrage — and a lively second-hand and refurbished market. Getmobil just raised $4 million to legitimize phone refurbishing inside the country.

“The Turkish government wants to decrease the trade deficit,” explains Mehmet Uygun, CEO and founder at Getmobil. “The government wants to create a circular economy. They don’t want the customers to buy brand new phones, because whenever a customer buys a brand new phone, the dollar goes out of the country.”

Global economics and trade policy is deeply fascinating, and can cause some really weird quirks in local mobile phone markets. In 2010, for example, Argentina introduced a set of rules that meant that if you wanted to sell products in the country, you’d have to manufacture there. That had a ton of strange effects; English-language books became almost impossible to buy or insanely expensive (I remember paying $65 for a hard-copy of Walter Isaacson’s biography of Steve Jobs in a Buenos Aires book store — which sold for about $29 in the U.S. at the time). It also meant that Apple yeeted out of the market altogether, choosing not to sell its iPhones in Argentina. And suddenly, long after everybody else had more or less forgotten BlackBerry even existed, the phone brand had a resurgence in the country when it decided to build an assembly plant there.

The same thing is happening in Turkey at the moment; Turkey, desperate to keep its GDP within the country’s borders, has put a hefty import levy on phones. It’s not easy to get around those limitations either — if you sneak a phone into the country, its IMEI will be blocked from the three major networks after 120 days.

The Getmobil team outside of its headquarters and repair lab
The Getmobil team outside of its headquarters and repair lab. Image Credits: Getmobil

Obviously, people still need phones, but, unwilling or unable to pay the incredibly high import taxes, they seek other solutions. Getmobil had its humble beginnings as a modest phone repair shop, and has since evolved into one of the leading e-commerce platforms in Turkey, specializing in the sale of refurbished electronics.

The lead investor, the slightly confusingly named Dutch Founders Fund (DFF), invested in Getmobil’s. “While DFF is based in the Netherlands, our focus at DFF lies in investing in B2B marketplaces during their seed phase,” says Hidde Hoogcarspel, co-founder and managing partner at DFF. “Our portfolio companies are not only located across Europe but also in regions such as Dubai and Egypt. These marketplaces typically operate across borders and sometimes even globally.”

Where there’s friction, there’s opportunity

As the Getmobil founders navigated the complexities of the electronics repair market, they identified a significant gap between the high cost of brand-new devices and the consumer’s desire for more economically viable alternatives. This realization prompted a pivot away from merely repairing devices to refurbishing and selling them, thus laying the groundwork for what would become Getmobil’s core business model.

In putting up high tariffs, the Turkish government created a grey market: People were selling and buying phones with cash, none of which was reported to the government. The good thing was that the money stayed within the country’s borders, but obviously, nobody was collecting taxes along the way, so that caused a new problem: Yes, the money was circular, but none of it was leaking into the country’s tax coffers.

“Turkey is an absolute outlier refurbished market. The price of a new iPhone in Ankara is far higher than in any other place in the world. The government has created a unique and far-reaching regulatory framework and incentive scheme, and imports are limited,” explains Hoogcarspel. “The formal refurbishing sector in Turkey is still in its early stages; the informal trade is thriving and is estimated to surpass the entire market size of $7 billion for new device sales. Tens of thousands of merchants operate within this informal segment.”

Eager to get the situation under control, the government brought in some big changes, including some new regulations, tax incentives and opportunities. In 2021, Turkey introduced a set of regulations that significantly bolstered the refurbished electronics market, creating a more structured and reliable framework for companies operating within this sector. These regulatory changes were framed as encouraging sustainable consumption practices, enhancing the quality and reliability of refurbished devices and reducing the environmental impact of electronic waste.

“[The Turkish government] introduced a refurbishment center regulation. They said ‘if you build the refurbishment center with some specific standards, we will not take 20% in taxes, we will take 1%,” explains Uygun. In addition, the government made it possible for the vetted refurbishment centers to offer installment payments — rather than having to pay for the devices in full. That’s extraordinary, the founders explain, because consumer credit is highly regulated in Turkey. They say that Apple cannot offer installment plans.

Getmobil’s growth trajectory has been remarkable, driven by a combination of strategic foresight, operational excellence and a deep understanding of the Turkish electronics — and regulatory — market. The company’s rise is characterized by its ability to offer consumers high-quality, refurbished electronics at competitive prices, thereby filling a critical market gap. This value proposition helped endear Getmobil to consumers, and has positioned the company as a vital player in Turkey’s electronics sector. And, presumably, the government is excited to be one step closer to being able to regulate the out-of-control second-hand market.

Winners: Local economy and the environment

While there’s little doubt that the main driving force behind the government’s regulations is revenue, forcing a more robust repair and second-hand market has a number of positive side effects, such as a dramatic increase in usable life of devices, and a significant reduction of e-waste.

Before the regulations, the refurbished electronics market in Turkey was chaotic and fragmented, and the quality and warranty coverage of second-hand devices was highly variable. The new frameworks put in place established stringent standards for refurbishing processes, including quality checks, warranty requirements and after-sales services. This legislative environment has played a pivotal role in leveling the playing field. By playing ball with the government’s regulations, Getmobil bought itself an edge — by promising to stick to the rules, adhering to high standards of quality and customer service, the company got itself a tremendous competitive advantage.

By aligning the interest of the customers (cost and quality), the government (ability to keep money inside Turkey, and collecting some taxes along the way) and Getmobil, everybody wins. Reusing, repairing, refurbishing and recycling extends the circular economy to a broader user base and means that the environment gets a little boost, too.

Navigating the intricacies of Turkey’s electronics market presents a unique set of challenges and opportunities for Getmobil. The team tells TechCrunch that the pervasive black market continues to be a big challenge: This shadow economy not only undercuts prices of legitimate refurbished electronics but also often compromises on quality and after-sales services, posing a significant threat to consumer trust. Moreover, staying abreast of and compliant with the evolving regulatory environment in Turkey adds another layer of complexity to Getmobil’s operations.

Dependent on regulation

Of course, the first step toward suppressing the black market was creating an alternative for it, and that’s where the regulations and Getmobil’s round of funding comes in.

For the investors, it remains to be seen whether this is a good investment. DFF clearly believes that there’s a huge opportunity here, but in the process, it is investing in a business that’s essentially made possible by a government regulation that suppresses cross-border trade. Turkey isn’t a member of the EU (conversations stalled out over alleged human rights violations perpetrated by the Turkish government), but if it were to become a member, the entire business model for Getmobil falls apart: EU countries cannot impose trade tariffs for cross-border imports and exports, and without that, it’s easy to imagine the Turkish market getting flooded with used and new electronics priced the same as in the rest of the EU.

Whether or not Getmobil’s future is secure depends entirely on geopolitical events and the direction of tomorrow’s trade tariff winds.

More TechCrunch

To give AI-focused women academics and others their well-deserved — and overdue — time in the spotlight, TechCrunch has been publishing a series of interviews focused on remarkable women who’ve contributed to…

Women in AI: Rep. Dar’shun Kendrick wants to pass more AI legislation

We took the pulse of emerging fund managers about what it’s been like for them during these post-ZERP, venture-capital-winter years.

A reckoning is coming for emerging venture funds, and that, VCs say, is a good thing

It’s been a busy weekend for union organizing efforts at U.S. Apple stores, with the union at one store voting to authorize a strike, while workers at another store voted…

Workers at a Maryland Apple store authorize strike

Alora Baby is not just aiming to manufacture baby cribs in an environmentally friendly way but is attempting to overhaul the whole lifecycle of a product

Alora Baby aims to push baby gear away from the ‘landfill economy’

Bumble founder and executive chair Whitney Wolfe Herd raised eyebrows this week with her comments about how AI might change the dating experience. During an onstage interview, Bloomberg’s Emily Chang…

Go on, let bots date other bots

Welcome to Week in Review: TechCrunch’s newsletter recapping the week’s biggest news. This week Apple unveiled new iPad models at its Let Loose event, including a new 13-inch display for…

Why Apple’s ‘Crush’ ad is so misguided

The U.K. Safety Institute, the U.K.’s recently established AI safety body, has released a toolset designed to “strengthen AI safety” by making it easier for industry, research organizations and academia…

U.K. agency releases tools to test AI model safety

AI startup Runway’s second annual AI Film Festival showcased movies that incorporated AI tech in some fashion, from backgrounds to animations.

At the AI Film Festival, humanity triumphed over tech

Rachel Coldicutt is the founder of Careful Industries, which researches the social impact technology has on society.

Women in AI: Rachel Coldicutt researches how technology impacts society

SAP Chief Sustainability Officer Sophia Mendelsohn wants to incentivize companies to be green because it’s profitable, not just because it’s right.

SAP’s chief sustainability officer isn’t interested in getting your company to do the right thing

Here’s what one insider said happened in the days leading up to the layoffs.

Tesla’s profitable Supercharger network is in limbo after Musk axed the entire team

StrictlyVC events deliver exclusive insider content from the Silicon Valley & Global VC scene while creating meaningful connections over cocktails and canapés with leading investors, entrepreneurs and executives. And TechCrunch…

Meesho, a leading e-commerce startup in India, has secured $275 million in a new funding round.

Meesho, an Indian social commerce platform with 150M transacting users, raises $275M

Some Indian government websites have allowed scammers to plant advertisements capable of redirecting visitors to online betting platforms. TechCrunch discovered around four dozen “gov.in” website links associated with Indian states,…

Scammers found planting online betting ads on Indian government websites

Around 550 employees across autonomous vehicle company Motional have been laid off, according to information taken from WARN notice filings and sources at the company.  Earlier this week, TechCrunch reported…

Motional cut about 550 employees, around 40%, in recent restructuring, sources say

The company is describing the event as “a chance to demo some ChatGPT and GPT-4 updates.”

OpenAI’s ChatGPT announcement: What we know so far

The deck included some redacted numbers, but there was still enough data to get a good picture.

Pitch Deck Teardown: Cloudsmith’s $15M Series A deck

Unlike ChatGPT, Claude did not become a new App Store hit.

Anthropic’s Claude sees tepid reception on iOS compared with ChatGPT’s debut

Welcome to Startups Weekly — Haje‘s weekly recap of everything you can’t miss from the world of startups. Sign up here to get it in your inbox every Friday. Look,…

Startups Weekly: Trouble in EV land and Peloton is circling the drain

Scarcely five months after its founding, hard tech startup Layup Parts has landed a $9 million round of financing led by Founders Fund to transform composites manufacturing. Lux Capital and Haystack…

Founders Fund leads financing of composites startup Layup Parts

AI startup Anthropic is changing its policies to allow minors to use its generative AI systems — in certain circumstances, at least.  Announced in a post on the company’s official…

Anthropic now lets kids use its AI tech — within limits

Zeekr’s market hype is noteworthy and may indicate that investors see value in the high-quality, low-price offerings of Chinese automakers.

The buzziest EV IPO of the year is a Chinese automaker

Venture capital has been hit hard by souring macroeconomic conditions over the past few years and it’s not yet clear how the market downturn affected VC fund performance. But recent…

VC fund performance is down sharply — but it may have already hit its lowest point

The person who claims to have 49 million Dell customer records told TechCrunch that he brute-forced an online company portal and scraped customer data, including physical addresses, directly from Dell’s…

Threat actor says he scraped 49M Dell customer addresses before the company found out

The social network has announced an updated version of its app that lets you offer feedback about its algorithmic feed so you can better customize it.

Bluesky now lets you personalize main Discover feed using new controls

Microsoft will launch its own mobile game store in July, the company announced at the Bloomberg Technology Summit on Thursday. Xbox president Sarah Bond shared that the company plans to…

Microsoft is launching its mobile game store in July

Smart ring maker Oura is launching two new features focused on heart health, the company announced on Friday. The first claims to help users get an idea of their cardiovascular…

Oura launches two new heart health features

Keeping up with an industry as fast-moving as AI is a tall order. So until an AI can do it for you, here’s a handy roundup of recent stories in the world…

This Week in AI: OpenAI considers allowing AI porn

Garena is quietly developing new India-themed games even though Free Fire, its biggest title, has still not made a comeback to the country.

Garena is quietly making India-themed games even as Free Fire’s relaunch remains doubtful

The U.S.’ NHTSA has opened a fourth investigation into the Fisker Ocean SUV, spurred by multiple claims of “inadvertent Automatic Emergency Braking.”

Fisker Ocean faces fourth federal safety probe