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6 reasons to invest in startups from Ukraine

June 10, 2022

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Ukraine has been engulfed in flames of war with Russia for more than three months. This may sound like a red flag from an investor’s point of view, but not everything is so black and white in the country’s tech sector.

Tech companies with Ukrainian roots and key markets in the US and Europe continue to operate seamlessly, even after ensuring that their teams and data are completely secure abroad or in the West of Ukraine. In addition, foreign embassies are returning to Kyiv, indicating that Ukraine’s capital may soon be safe enough for companies to reopen their offices.

IT companies have demonstrated their resilience and ability to deliver results amidst the worst challenges. This is one of the many reasons that make Ukraine a successful hub for future unicorns.

Let’s look at six reasons to invest in up-and-coming tech startups from Ukraine.

He has proved his ability to face the crisis

The Ukrainian IT sector has shown unprecedented resilience, resilience and ability to face any situation during these war months. Having prepared emergency plans in advance, many technology companies moved their teams to safety during the first days of the war or even before the battle began.

Currently, many companies spread their teams between offices in the west of Ukraine and abroad to ensure that operations continue uninterrupted. They have minimized risk while maintaining discipline and access to the talent pool.

Most Ukrainian Tech Startups Still Hiring

According to a DOU survey, almost 90% of IT specialists have not seen any change in their jobs or workloads since the start of the war. This indicates that Ukrainian IT companies have reliable cushions.

More importantly, they continue to hire talent to support their business and help the economy. The IT sector is the third biggest attractor of foreign exchange to the economy in the country, which makes the sector important for economic stability.

Since the development of the IT sector is an integral part of the maintenance of the country’s GDP, the government fully supports it. For example, during the war, the secure areas in the west of Ukraine turned into new centers for IT companies.

Ukraine has a huge talent pool

Ukraine is one of the most popular centers for the development of IT. It is here that EPAM, Luxoft and other outsourcing giants have gathered large numbers of software engineers, business analysts and other technical experts.

There has also been a steady increase in the number of IT specialists in the last 10 years. For example, in the first half of 2021, the 50 largest Ukrainian IT companies increased their workforce by 10,000 professionals. It is also home to tech startups that are leaders in their respective fields – Jiji, Taimy, Reface, MacPaw and Headway, to name a few.

Startups are integral to creating a new layer of tech firms in Ukraine

Ukrainians want to go back home, and some have already done so. Of the nearly 7 million Ukrainians who have crossed the border since the war began, 2 million have returned, with more coming back. These people are showing that they are ready to work hard for the reconstruction of the country.

Another thing to consider is that the world is financially supporting Ukraine, providing a necessary resource base for an economic rebound. Combine this with the fact that Ukrainians are willing to do their best to live better in their country, and you get very promising prospects for post-war development.

Today’s startups will form the foundation for a new layer of technology companies that will add significant value to the Ukrainian economy.

Ukraine is cost-effective for building tech firms

Per research by Doing Business, Ukraine is one of the best countries to run a tech business because of the cost-effective tax regime and cost of living for IT companies.

The country also has a strong educational infrastructure for the study of technology, mathematics, finance and economics. And due to the increasing demand for IT specialists, many large companies are opening their own educational centers and organizing internships. These trends are only gaining momentum.

The whole world is supporting Ukraine

Ukraine has long been an underdog in Europe, and did not have access to the capital it needed to be on par with its more developed neighbours. As a result, a range of bootstrapped tech companies are growing rapidly without outside capital.

This has helped founders be more disciplined in allocating funds or scaling up operations for their clients in other countries. The combination of such discipline and export-oriented product development is a fail-proof mix for sustainable development. It also offers a strong opportunity that can be accelerated with investments.

At the same time, Ukraine’s international partners are providing the necessary resources for the country’s economic growth, so companies will have even greater potential for global growth. The European Union stands in complete solidarity with Ukraine not only by providing humanitarian, political and financial assistance to its people, but also by establishing the Ukraine Solidarity Trust Fund for post-war Ukraine reconstruction.

The current influx of international investments, a favorable tax regime and a strong talent foundation coupled with the Ukrainian people’s desire to return to their home countries make Ukrainian companies a desirable investment target.


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