This weekend marks exactly two years since Russia’s illegal, unprovoked and brutal invasion of Ukraine. Despite the overwhelming odds and ongoing problems in Western aid supplies to counter Russia’s onslaught, and the trail of devastation left by the fighting, the country and its startup ecosystem have rallied, becoming a case study in resilience.
Of the 511 tech companies based in Kharkiv by February 2022 — these days a city best known for regular Russian bombing — 500 are still in operation, according to organization supervision of the Kharkiv technological cluster.
Tech companies in the West have rallied around the industry, increasingly partnering with Ukrainian tech companies on a range of initiatives.
This week, Google launched the second “Google for Startups Ukraine Support Fund” with a budget of $10 million to support Ukrainian startups in 2024 and 2025. Selected Ukrainian startups will receive up to $200,000 equity-free funding, as well as Google mentoring, product support and $300,000 in Google Cloud credits. Since the start of the war, Google claims to have allocated more than $45 million in direct aid and $7 million to support humanitarian efforts.
Since the war broke out, the program has provided 58 startups with $5 million in non-equity grants and $15.8 million in seed funding. Tech companies supported in this way include Skyworker.ai, Mindly and Zeely. Zeely raised a $1 million seed round last year.
Meanwhile, the Estonian startup accelerator Wise Guys launched Growth Ukraine, a program for startups in Ukraine.
And the EU-funded ‘Seeds of Bravery’ project work has launched five programs to support Ukrainian tech startups with grants ranging from €10,000 to €50,000.
Last week, the non-profit startup support program UK-Ukraine TechExchange was launched, specializing in defense technology and agriculture.
The private pro-bono program works primarily with start-up companies developing drones, UAVs, sound-based missile detection, anti-drone technology and drones for agricultural applications.
Ukraine’s tech sector is surprisingly resilient and even growing.
ONE recent survey by the Lviv IT Cluster (“Adaptability and Resilience Midst War”) — which it said is based on interviews with 7,000 technology experts and more than 400 companies — found that while a significant number of technology experts have left the country, the majority remain. including Ukrainians studying and entering the workforce at home and abroad.
The total number of technology specialists, it said, has increased by more than 7%, to 307,600 people. About 242,000 of them continue to live and work in Ukraine. The number of Ukrainian technicians dispersed internationally stands at 65,000 from 55,000-57,000 a year ago, an increase of 20%.
These workers, and Ukraine’s technology sector, helped keep the country’s economy afloat amid the war.
The technology industry contributed 4.9% (or $7.1 billion) to Ukraine’s GDP last year. In the Emerging Europe IT Competitiveness Index, published in April last year, Ukraine ranked 12th, increasing from the 14th of 2022.
Poland, unsurprisingly given its shared border, quickly became the top country for those leaving the country. About 36% of Ukrainian CEOs plan to open new offices, 28% of them abroad, with the majority choosing Poland as their second base of operations.
Ukraine is also exporting the technology behind its rapidly growing digital government. mRiik, Estonia’s latest digital tool, has been based on Diia application of the Minister of Digital Transformation of Ukraine, which securely stores identity cards, passports and driving licenses digitally, as well as allows access to certain public services.
The same Ministry of Digital Transformation also manages the Ukrainian Startup Fund, which has become the country’s largest angel investor, backing more than 350 startups. Many of these startups, responding to the climate in which they work and are funded, have turned to defense and dual-use applications.
To further fuel this ecosystem, in the spring of 2023, the country launched a defense technology initiative called BRAVE1. This accelerates innovation in defense and security. He’s got is funded more than 400 projects, with nearly 200 also undergoing live military testing.
The most mature Ukrainian startups and startups led by Ukrainian founders, have not stopped either:
• Preply raised an additional $70 million in funding last year — a combination of debt and equity — to expand its Series C to $120 million. It now has 650 employees and 40,000 language teachers. It claims to have grown revenue 10x by 2021 and recently opened a new office in New York. It provides free group language lessons to displaced Ukrainians and charges no commission to teachers based in Ukraine and others.
• Ukrainian software company MacPaw is in the final stages development a beta version of an app store for iOS apps, aimed at EU-based iPhone users.
• At the end of 2023, Firefly Aerospace closed another round of financing, valuing the company at $1.5 billion in pre-money, he claims. It says it has raised $300 million in funding as of February 2023.
• Carmoulaa UK-based car finance fintech co-founded by Ukrainians Roman Sumnikov and Ihor Hordiychuk, secured $125 million in funding in February 2023, followed by an additional $16 million in January 2024. Backed by VCs including VentureFriends, InMotion Ventures and u. ventures.
• Fintech farma digital banking solution pioneer founded by Ukrainians, has raised $22 million to enter emerging markets.
• DressXa digital fashion retailer founded by Ukrainians Darya Shapovalova and Natalia Modenova, has secured $15 million to expand its AR and digital clothing offerings.
• Vidbywhich has AI-based voice translation solutions, with an R&D center in Ukraine (and a Ukrainian CEO and co-founder).
• NewHomesMatea new home construction market in the US, raised $5.5 million in funding.
• ELVTRan education startup with Ukrainian founders and team, keeps 45% of its staff in Ukraine.
• Geek VC is a $23 million VC fund that invests in Ukrainian immigrant founders. The fund was created by Ukrainian Vadim Rogovskiy in collaboration with Ihar Mahaniok months before the start of the war. 25% of their portfolio companies are managed by Ukrainian founders.
• Hypra Fund which began shortly after the invasion of Ukraine. The fund has allocated nearly $20 million to companies with Ukrainian heritage, including $10 million to Trinetix.
• Go with Ukraine, is a non-profit organization that curates an online platform of over 240 brands based in Ukraine. By choosing to #spendwithUkraine, consumers around the world can stand in solidarity with the people of Ukraine.
• Speaker is an AI tool for voice playback technology that works with Hollywood movie studios. Because the Crimean Tatar language is considered critically endangered by UNESCO, Respeecher’s group is gathering the voices of Crimean Tatar speakers to protect a language threatened during the Russian occupation.
• Petcubea company that develops interactive cameras for pets, has launched the Cam 360 and a GPS Tracker for pets.
• Everyrun is a Ukrainian-UK social running platform offering solutions for marathon organisers, charities and companies aiming to host running events. In the last year its product has been on the market, the company has formed partnerships with marathon organizers in Lithuania and Italy and attracted runners from 32 countries.
