Despite the ongoing devastation caused by Russia’s invasion, Ukraine’s startup ecosystem remains resilient and continues to thrive. According to a recent analysis, 79 percent of the country’s startups survived the beginning of the war, with many relocating to other countries. New startups have also emerged in the midst of the conflict, showcasing the entrepreneurial spirit of the Ukrainian people.
Investor interest in Ukrainian startups is evident, with the launch of a £15 million London-based fund by Ukrainian entrepreneurs Denis and Viktor Gursky. The fund, known as 1991 Ventures, aims to invest in untapped talent across Ukraine and Central and Eastern Europe. This highlights the potential that investors see in the region and the opportunities for growth and innovation.
The Gursky brothers have been instrumental in Ukraine’s tech economy since 2012, focusing on transitioning the country from an outsourcing economy to a product-based one. Their efforts have led to the establishment of the 1991 Accelerator, which has supported around 200 companies through accelerator and incubator programs. However, the war has impacted their operations, leading to the evacuation of their team in Mariupol.
By locating the 1991 Ventures fund in London, the Gursky brothers hope to provide Ukrainian and CEE startups with access to finance, expertise, and international markets. London’s status as a financial hub offers opportunities for growth and expansion, making it an ideal location for startups looking to scale globally. This strategic move aims to facilitate the growth of Ukrainian startups in the international arena.
One notable trend in the Ukrainian startup ecosystem is the focus on locking in funding from European and American VCs to expand into international markets. Successful products originating in Ukraine often move into larger markets due to the availability of capital and a broader customer base. This is particularly prevalent in the B2B sector, where startups face challenges in making sales domestically.
Despite challenges posed by the ongoing war, Ukraine’s startup sector offers diversity and innovation, with companies spanning various sectors, including B2C, B2B, and B2G. Recent successful Ukrainian startups include Grammarly, Preply, DressX, and Goit, showcasing the breadth of talent and innovation in the country. The emergence of govtech opportunities, defense technology, and cybersecurity expertise further highlight the potential for growth and investment in Ukrainian startups. With a focus on government-focused products, Ukraine’s growing democracy presents opportunities for solutions that can be applied in other emerging democracies.
