UNO Blog

New survey finds 92% of Ukrainian startup founders agree that Ukraine is now a “better place to seek growth”

KYIV – A new survey of 60 Ukrainian founders, who have collectively raised $35,000,000, reflects significant optimism about Ukraine’s shift toward a new tech-driven economy.

London-based research firm RA Capital partnered with Kyiv-based eō Business Incubators, UNIT.City, and the Ukrainian Startup Fund to survey sentiment among Ukrainian startup founders. The survey, administered online in August 2021, captured the increasingly positive outlook of Ukrainian tech founders. Significantly, 92% of those surveyed agreed with the statement that recent developments in Ukraine’s ecosystem made Ukraine a “better place to seek growth for a startup business.”

82% of surveyed startups maintain their entire founding team in Ukraine, despite half having a legal entity outside Ukraine. Reflecting the depth of Ukraine’s talent pool, 100% of respondents base their core developer teams in Ukraine, while teams based overseas tend to focus on sales, marketing, and finance.

Among the top three reasons why founders stay in Ukraine are cheap and qualified talent (36%), opportunities for growth within Ukraine and the Ukrainian startup ecosystem (33%), and their primary focus on the Ukrainian market (23%).

Innovative deep tech startups are the main focus of the surveyed founders. Artificial Intelligence and Machine Learning (37%) and Big Data (22%) are the most popular technologies, followed by Hardware (15%) and Internet of Things (11%).

“Interest in Ukrainian startups among the world’s largest investors has been steadily growing year-to-year, with Andreessen Horowitz, 500 Startups, Techstars, and Y Combinator, among others, committing significant capital. In light of the national focus on new technologies, including the government-sponsored Ukrainian Startup Fund, Ukraine is poised to become one of the world’s leading technology innovators,” says Charles Whitehead, a Professor at Cornell University and founder of eō Business Incubators, who helped shape the content of the report.

“We are seeing the rise of pre-seed, seed, and later-stage startups that can raise millions of dollars while still being based in Ukraine,” Whitehead noted. “The platform is in its early stages, but as Ukraine’s ecosystem continues to evolve, startups at various stages of funding no longer need to relocate to the United States to build their businesses.”

In their responses, founders agreed that the fundraising environment is improving. “It is easy to do sales and fundraising from Ukraine pre-series A,” said the founder of a Ukrainian startup that raised $1.5 million. “Being based in [the] US does not imply any advantages, but it also implies higher costs,” said the CEO of a Ukrainian startup that raised $1.4 million.

Ukrainian founders still register entities abroad in search of fundraising, scaling, and a more secure legal system. A clear majority of respondents (65%) whose companies are registered in Ukraine have plans to register a company abroad, with the United States (56%) being the top destination.

“Ukraine is number one in terms of contributions globally to science and technology, and the World Economic Forum ranks the country among the top 4% in terms of the growth of innovative companies. If you look at late-stage emerging economies, when assessing innovation output and performance relative to innovation inputs, again, Ukraine is number one,” said Whitehead. “This is a country poised for growth, it is Silicon Valley 40 years ago, it is Israel 30 years ago.”

“Three years ago, startups in Ukraine did not have as much support as they have now—today, Ukraine even has unicorns to boast about. But generally speaking, the startup sector remains underfunded. We have yet to see the emergence of a significant local investor community. The survey helps make clear that this is where a significant potential for growth will come from,”added Vadim Kudruk, the founder of RA Capital.

If you’re an investor and want to learn more about investment opportunities in Ukraine, join the only course on early-stage investing in Ukraine – Ukraine as Number One – a four-day live masterclass designed and taught by American academics and experts. 

A full copy of the report can be found at: