Nataly Veremeeva, Director, TechUkraine, Pavlo Kartashov, CEO, Ukrainian Startup Fund (Innovation Development Fund), Ihor Markevych, Head of Strategy and Development, Ukrainian Startup Fund (Innovation Development Fund) shared their thoughts on the current state of the Ukrainian startup ecosystem for the Startup Genome.
The Impact of War & Current State of the Ecosystem
Nataly: The war was a shock for the whole Ukrainian nation and the country’s economy. However, the tech sector was among the few that showed impressive resilience. It showed growth of exports of IT services of more than 5% despite all the challenges the sector has faced, raising up to $7.4 billion. The size of investments in Ukrainian startups in 2022 was also considerable. There were dedicated funds and special programs launched by various programs from agencies including USAID, GIZ, Google for startups and others. A lot of work has been done to improve the investment climate in Ukraine and prepare frameworks for post-war recovery. This said, startups are still struggling to attract investment and for the startup ecosystem to show its real strength we need more capital in the country.
TechUkraine is an NGO, the objective of which is to unite and coordinate all ecosystem stakeholders, share information about our ecosystem successes on the TechUkraine.org portal, launch startup-support initiatives and act as a networking hub for matching local and global players.
Changing Focus
N: There was an important shift in terms of the problems that startups are solving. There is more focus on resolving the country’s immediate needs in military technology, logistics, and communication. A big amount of focus from the tech sector is going towards helping Ukraine, both in terms of financing, technology, and educated tech professionals. Over 300,000 people are working in IT and internet armies, that is, working in the area of Cybersecurity and on other tasks.
Our Ministry of Digital Transformation has published a list of verticals that are currently a priority. A really important segment for now is Militarytech, and we have seen a lot of new solutions in this area: drones, navigation systems, autonomous vehicles. These projects were undertaken by established companies, startups, and higher educational institutions. Cybersecurity is another area where there is a high level of activity.
Brain Drain & Talent Retention
N: Women are currently our ambassadors, including in tech. They have ties in the country, husbands, partners, parents, and others still here. A lot of them are waiting for the war to finish and also travel back and forth to visit their family members, so the connections are maintained naturally.
Ukraine also still offers very good conditions for doing business: it is comparatively inexpensive and has a very qualified workforce, so even if founders and some parts of the team moved abroad, people are still interested in growing a team in Ukraine because of the quality and pricing of human capital, apart from the emotional part.
Maintaining a Strong Ukrainian Startup Community
N: Communities have a common goal of staying connected. We all want our country to win in this war and even if a person’s location has changed, their heart and thoughts are still in the country. There is a big difference between emigration out of choice and changing location because of the war. With technology, it is comparatively easy to stay in touch. COVID taught us to work remotely on a regular basis. With the beginning of the war we just went on doing it, using digital tools and habits that were already in place.
Apart from that, a large amount of Ukrainian public services had already moved online, so it is also easy to interact with the state, even from a distant location. Another aspect is the Diia app, which offers a wide variety of public services and additional options, like questionnaires from the state to know public opinion and even military-focused services, like sharing the enemy location or for people notify that they have just seen a rocket fly over, thus helping our air-defense systems locate and extinguish the attack.
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