A delegation from Ukraine’s startup ecosystem visited Luxembourg from 5-6 December to build bridges and show that there are opportunities in Ukraine despite the war.
In the first half of 2022, tech exports from Ukraine grew by 16%, and for the first five months, they accounted for half of the country’s exports.
The opportunities for Luxembourg in Ukraine are vast, said Natalya Veremeeva, director of TechUkraine, a Ukrainian NGO promoting the ecosystem that was founded in 2019. “There are a lot of challenges that we need to solve now. Ukraine can become a test bed for startups with solutions,” she told Silicon at LHoFT on Monday.
Areas requiring solutions include defence, notably in surveillance and communication. “We are super grateful to Elon Musk for providing us with StarLink, but there could be alternatives so that we do not put all of our eggs in one basket,” Veremeeva explains. Cybersecurity is another field in which startups can gain valuable practical experience. “This is the first time that a war has entered into the cybersecurity space,” Veremeeva says, adding: “I believe that there will be tasks to solve for all sorts of hacker groups and people working in the cyber to test these types of activities, maybe also for the learning purposes.” She also sees opportunities to test products in logistics automation as well as medtech and mental health applications.
SET University, a new, privately-run university focused on tech entrepreneurship, recently ran bootcamps for startups from outside of Ukraine to help them better understand the market. “It is possible to travel to Ukraine from abroad and we can put startups in touch with other companies active in the same fields,” university president Iryna Volnytska told Silicon Luxembourg.
After the war, the delegation said they would like to attract startups to partner or establish activities in Ukraine. Besides having the tech talent, the country takes just 5% tax on earnings from tech employees, keeping overheads low for employers. “For companies it’s still a good situation to work with Ukrainian companies,” said Veremeeva.
The delegation also highlighted the progress made by Ukraine authorities in derisking startup activities in terms of transparency, AML and anti-corruption. These include the creation of Prozorro, an online public procurement platform ensuring open access to public tenders in Ukraine. Ukraine has also introduced an e-domilication process for startups to register their activities and the State conducts due diligence on the startups’ activities. “For the investor, it’s a de-risking that the company is supervised by the government,” explains Valeriia Kotsur, a compliance expert and Ukrainian entrepreneur living in Luxembourg.
She added: “We understand that there is a lot of capital in the hands of private investors and to facilitate investment, proper governance and oversight have to be in place.”