Ukrainian startups are showing resilience in the face of the Russian invasion, with two Ukrainian tech companies joining the Ukrainian unicorns list.
airSlate and Unstoppable Domains (US-based with Ukrainian founders) were the latest joiners of the exclusive club. However, for the majority of startups, the financial state is uncertain.
According to a survey conducted by ecosystem promotion platform Tech Ukraine, nine out of ten startups surveyed said that they needed financial support, with 48% requiring revenue or new investment in the next three months in order to operate at current levels. An additional third of startups expected to face financial problems within six months.
Monte Davis, CEO of startup builder Demium, said: “Start-ups that depend on the local market are having a much harder time as they find it difficult to gain the momentum that they need. Overall, Ukraine’s start-up ecosystem has shown an incredible resilience as they navigate the management of their ventures in a situation that many can simply not fathom.”
The report, “The country at war: the voice of Ukrainian startups”, found that a quarter of respondents had forged new contacts to help retain and grow their business during the war, while just over a third were seeking new contacts in their field.
Other key findings include:
- 44% of startups have already relocated;
- The most popular foreign destinations for relocation were the EU (38.6%) and the US (10%);
- The majority of startups have kept at least part of their operations or team in Ukraine;
- Of startups which have not relocated, only 12% said they were thinking about it while 10% had yet to decide;
- One in ten startup employees has left their respective firms since the Russian invasion;
- Four in ten startups have not seen a reduction in team numbers;
- Overall, teams that had up to 10 employees before the war have shown greater resilience than those employing 11+ people;
- More than half of all startups surveyed say they expect to expand operations in the short-term and only one in four expect their operations to be reduced;
- Ukraine remains the key market for 60% of the country’s startups, followed by the EU and EEA (46.4%) and North America (US 34.3%, Canada 9.3%).
Some 153 startups participated in the survey, which covered questions like registration, relocation, financial situations, support and market development. The research was commissioned to understand the impact of the Russian invasion on Ukrainian startups and find the most effective ways of support. It was conducted in partnership with the Ukrainian Startup Fund, the Ministry of Digital Transformation of Ukraine, Emerging Europe, Tech Emerging Europe Advocates, Global Tech Advocates, and TA Ventures.