Moreover, production in Slovakia helps to cope with another problem. Because of the martial law, Raybird cannot export their products, and the final price is limited in markup to 25%. Besides, including development costs in price is impossible.

The factory in Slovakia allows the company to avoid these restrictions. It gives more opportunities in the global market so that countries of the European Union and NATO can buy their UAVs.

The Slovakian factory can build 25 reconnaissance systems per year. Their output will be increased 4 times after closing the round. Skyeton is currently raising $15 million in investments for this expansion.

Apart from the drone factory, Stepura duplicated another of his businesses in Slovakia – the production of modular houses Homers.

What is known about Raybird made by Skyeton

Skyeton has been producing ultralight planes and UAVs for over 17 years. Among the developments of Skyeton, there is the unmanned aircraft system Raybird-3 for long-term intelligence missions of civil and special forces.

• The price of the one system is $1,2 million. It includes three planes, portable ground control stations, an antenna system, a launcher, video and photo cameras, and radars.
• The most expensive camera on the plane costs €300,000. Aside from expensive details, 60-70% of the prime price goes on the development and engineers’ salaries.
• The drone can fly up to 28 hours and cover up to 2,500 kilometers at a height of up to 4,500 meters which makes the drone almost invisible for electronic warfare.
• Only 5 global companies have similar ratios of weight and durability of stay in the air drones yet foreign samples are much more expensive.
• The Defence Forces of Ukraine had ordered over 75 intelligence systems in the period from February of 2022 to May of 2024.

AIN asked Ivan Petrenko, the Angel One Fund Managing Partner and CfE Accelerator Executive Director, about the launch of his new fund, its startup preferences, and the average “temperature of the market.”

Let’s begin with the changes the venture, angel investment, and startup world has undergone compared to 2023 or 2022.

We all know each other in the industry. Some love to sound super positive. I prefer to sound realistic so that I can understand where the bottom is and how to get out.

Many say that we, Ukraine, are almost the leading startup development market in Eastern Europe. Hearing this, I have a bitter smile because I don’t see such a trend. This year, however, the situation became smoother thanks to grant programs, such as Google for Startups, IT Consortium, Seeds of Bravery, etc.

In my opinion, it is one of the two essential conditions needed for new startups to arise. Their teams need money. And it is grant funds for the first time. Before the full-scale invasion, USF granted $25-50k per applicant, and it was a significant boost for the industry. In 2022, they stopped doing this, resulting in a quick shrinking of the industry. It was one of the reasons.

Nowadays, new grant programs work in Ukraine, and some old ones are back, too. It’s a perfect chance for startups to give it another try. I think there will be more of them in six months.

I presume everybody is now looking at Defense Tech.

Not everybody. It is our bubble where all eyes are on deftech.

However, it is a very restrained domain most ventures would rather avoid because they are not allowed to invest in it. For example, we at Angel One may not directly invest in Defense Tech.

Is it because of your internal policy?

It’s not entirely about our policy. Legally, we are a US-based fund with several regulatory restrictions, so we cannot invest in Defense Tech. Otherwise, we would lose our investors. So, at the early stage, by establishing a fund, you should discuss [with partners] whether it will invest in the defense domain.

And there is a very thin line — dual use, deftech, and lethal weapons next. Those are three very different things you must be careful with. The same discussions we have in Ukraine. It’s obvious why. So, we often have to work with targeted deftech investments. There is no such bubble abroad. However, many players look at Ukraine carefully and pay more and more attention.

The funds that can invest are very familiar with the required information. Their analysts gather all the data about the current situation in Ukraine. They select projects with great caution because the funds must report to institutional or private investors.

Many things depend on Ukraine. And a lot of things are done. But a long way is still ahead. Anyway, when we invest in Defense Tech, we expect that their team and legal entity are based and registered somewhere in Delaware, as well as their technology, to enjoy protection according to the local legislation.

We do care that a deftech startup keeps thinking about sales not exclusively in Ukraine. The team should plan their international activities in advance. That’s why production or development is often located outside of Ukraine, which means a different market and an adapted business model.

The most recent investment of Angel One Fund in six startups was a syndicate deal with private investors, wasn’t it?

Yes. The same investors we had at Angel One.

So it was the Angel One syndicate member, right?

Mostly yes. Now, we are working on the launch of a Defense Tech fund. Hopefully, it will happen between September and October. We need an official opening to invest in defense startups not only through syndicate deals but also as a fund because there are interested investors who want to join not our syndicate, but the fund directly.

So, are there a bunch of investors committed to a new fund?

Yes, there is a particular sum. We may speak about a $1.5-million commitment. We are working on its institutionalization to run deftech investments as a fund.

Until there is no fund, we keep searching for teams and invest via syndicate deals.

Do you have a plan with your targets for this new fund? Which startups would it be?

We don’t care if it’s a hardware or software project. Software is always more attractive due to its better scalability, safety, and lower need for investment. However, I am not sure about the last one.

It is highly unlikely that it will be pre-seed rounds since fewer and fewer investors desire to enter at this stage, where you cannot check the actual demand and sales of a product. So, mostly, it will be very early seed and maybe late pre-seed rounds with a well-tested working prototype and pre-orders.

OK. Let’s return to the Angel One Fund. It currently has $1.5 million, right?

We have already got $2.5 million.

How many projects do you plan to invest in until the end of the year?

Recently, we confirmed our fifth investment. Hopefully, it should be three more until the end of the year. We wouldn’t reach more for certain, because we have another deftech focus with five more investments this year.

Are you going to close to close the fund in 2025, or not?

No, we will keep raising. So, the fund will keep working. It will be a nonstop process. We decided in favor of a rolling fund that will be constantly filled.

Speaking of your syndicate deals, we had a conversation with Dmytro Vartanian (SID Ventures) recently. Can you tell us about the platform you use to close deals? Do you use any technological platforms?

At the moment, we don’t use any. All prefer SAFE or Convertible Loans. It’s a universal tool with more than enough functions.

With the investments in six startups, you also announced that you will support them. What will it look like?

We are only learning. The fund is new and small. We don’t have any military expertise yet, so we cannot provide it. But we do have good business expertise thanks to our network of private investors, primarily US-based. They have good contacts.

We also can help with sales. If a startup team is interested in entering the US market, we undertake the work with contacts, which we get from our private investors.

Which domains are the market’s top priority?

It is AI, for sure.

I also hear a lot about EdTech.

First, we declared at least 30% of deals in EdTech would be a target. But so far, we haven’t made a single deal. SAS remains one of the simplest and most popular models as always. MedTech and BioTech are growing fast. There are vast investments and technologies quickly grow.

I think EdTech is less popular. It was three to five years ago, especially during the COVID pandemic, but the MedTech, BioTech, and FinTech development is very impressive. And there is, for sure, AI constantly added to different products.  Finally, people have the idea that AI is not a product but a tool. You should learn how to use it to create added value for your product.

Did the startup average ticket and entry terms change for Angel One during the full-scale war? What are the startup rounds you are looking for?

The average ticket didn’t change and remains about $150,000. The terms, more or less, are the same. In any case, we realized we are not a pre-seed fund, as we declared once. After all, we became a seed fund. Our team seeks products with customer feedback and dynamic sales. So, we are cautious by investing in startups without sales.

This requirement is a must now, and our investment committee doesn’t want to speak with teams that don’t generate sales. The only exception here could be some real innovations, such as quantum computers. But not so many startups work with them. OK, there is Haiqu, but our fund arose too late when they already had raised everything they ever wanted. This startup was, for sure, the one we would be very interested in investing in.

So, they must show some traction and a clear sales strategy. It is one of the weaknesses, particularly of Ukrainian teams.

And which of the Angel One Fund investments is the fastest-growing one?

Our first investment, Zeely, is showing the best results so far. They grow very well. I understand that the estimated value is a theoretical indicator because there can be any number until somebody puts a money bag on the table. Nevertheless, they attracted new investments and tripled in size for the past year. It is a very substantial indicator.

Another example is GO TO-U. Their sales are growing each month, maybe not so fast as at Zeely, but they do. They also entered the USA market and made several potentially good deals, including one with Siemens. We expect their mighty growth about the end of this year.

You are also starting a new IdeasLab program. What are the terms? Are there any changes compared to previous times?

There are no specific changes except for the constant improvement of the CfE Accelerator program. The program aims to support student teams in a hybrid format for free. Our main goal was and remains to let students try to launch a product, make their first mistakes, etc.

We decided to create our own learning program for future startupers where the students can get essential skills and apply them in practice by doing everything on their own. IdeasLab’s other goal is to allow students to do everything within three months. It is the only university program in Ukraine providing student teams not only with knowledge but also workspace and grants up to UAH 200.000 at the idea validation stage. Now, we have over 100 mentors, the founders of Ukrainian and foreign startups, who spend their time teaching the students. Among them are the founders of SoftServe, Angel One, LvBS, Netflix, Microsoft, TedxLviv, AiSDR, The Gradient, QubStudio, Kormotex, Tickets.ua, Harmix, Medallion, etc.

We already have $1 million in so-called credits from different companies, such as Grammarly, Salesforce, and Notion. We teach students how to use it. More applications are expected this year than in the past year.

The letter from the bank states that the decision is related to recent changes in the bank’s policy, which prohibits opening and maintaining accounts for citizens of seven countries, which, for some reasons, includes Ukraine.

Mercury will also stop supporting accounts of companies whose founders have passports from Belarus, Cuba, Iran, North Korea, Russia, Syria, and Venezuela. The accounts are scheduled to shut down on August 13, 2024.

Mercury’s comments

In a comment to the post, the bank’s representatives explained that the changes apply to founders of companies living directly in Ukraine, not to Ukrainians doing business in the United States.

They acknowledged the error in their help center, which previously incorrectly stated that they refused to work with all clients with Ukrainian passports. Mercury assured that it will continue to work with Ukrainians doing business in the United States, but is currently unable to serve companies with founders based in Ukraine. The bank apologized for any confusion caused by the error.

“To give more context about the policy change: while Ukraine is not comprehensively sanctioned, several regions of Ukraine are sanctioned. We previously applied a region-based model to support as many customers in Ukraine as possible; however supporting this policy while also upholding our rigorous standards on compliance has become increasingly complex. We will continue to revisit this policy and hope that we can change this in the future,”

the bank explains.

Mercury promised to review this policy in the future and hopes to be able to change it.

This is not the first time that Ukrainian entrepreneurs have faced similar problems with the American financial system, Azhnyuk pointed out.

Earlier this year, Chase Bank refused to transfer money to Ukraine from its clients’ American accounts. In January 2021, before Russia’s full-scale invasion, the financial service Robinhood blocked access to its website for users with Ukrainian IP addresses.

Since the Russian war started, many American websites have also begun blocking traffic from Ukraine, making them accessible only through VPNs.

• Aspichi was co-founded by Viktor Samoilenko and Maksym Goncharuk, as VR technology company specializing in psychological rehabilitation. Their flagship product, Luminify, offers immersive VR therapy solutions designed to treat various psychological disorders, enhancing the quality of life for patients and residents in care facilities.

• The startup is incorporated in Delaware, but its R&D is in Kyiv. Its founders both have more than 15 years of experience working in international companies around the world. In March 2023, Aspichi secured $500,000 from the SMRK fund.

• Rocky Mountain Care, a US-based provider of post-acute and long-term care services. Recently, the company conducted a study within their recreational activities program to evaluate the effectiveness of Aspichi’s Luminify VR therapy in treating psychological disorders such as anxiety, depression, and PTSD.

Key highlights of the study:

• A considerable reduction in anxiety and depression symptoms among residents who used the Luminify VR therapy as part of their recreational activities.
• The overall well-being of residents improved significantly, with many reporting increased feelings of calm, relaxation, and general happiness.
• The inclusion of Luminify VR therapy as a recreational activity not only provided entertainment but also served as an effective behavioral therapy tool, enhancing the overall recreational program.

We are proud to partner with Rocky Mountain Care to bring cutting-edge VR therapy to those in need. Our mission is to harness the power of technology to improve mental health outcomes, and this collaboration is a significant step forward in achieving that goal,

said Viktor Samoilenko, CEO of Aspichi.

After the study, Rocky Mountain Care has become a customer of Aspichi with the intention to expand the VR therapy solution to additional RMC post-acute care and assisted living facilities.

• Preply was founded in 2012 by Ukrainians Serhii Lukyanov, Dmytro Voloshyn, and Kyrylo Bigai. It develops an online language learning platform that connects teachers with students using a machine learning algorithm.
• The startup team consists of 500 employees of 60 different nationalities in 30 countries. In 2023, the startup opened its first office in the United States. Preply’s valuation at that time could be $500 million. In July last year, Preply received $70 million from Horizon Capital, an Ukraine-focused venture fund, Reach Capital, and Hoxton Ventures.

Our new London hub will enable us to foster closer connections, enhance collaboration, and tap into the city’s rich talent pool. A heartfelt thank you to our dedicated teams for making this possible and for continuing to build the unique Preply culture we cherish,

the company’s post in LinkedIn.

The new London office will allow Preply to establish closer cooperation between teams, as well as take advantage of the city’s strong human resource potential.

• Mission Possibleis a transformative offline venture-building program, launched with the support of the Ukraine-Moldova American Enterprise Fund in September 2023, aimed at building and scaling Ukrainian startups. The first batch wrapped up with 20 entrepreneurs on board. The fresh batch will last from September 2024 to February 2025.
• Ukraine-Moldova American Enterprise Fund (UMAEF) is a regional fund with $285 million in capital, operating in Ukraine and Moldova over 29 years focusing on investment in small and medium-sized businesses.

Mission Possible has managed to bring together a community of over 100 people — experts and founders keen on startup growth. The program addresses key early-stage entrepreneurial challenges, providing participants with essential knowledge, access to global markets, and capital through networking and partnerships with international organizations,

Anton Waschuk, Director of Innovation, Education, and Entrepreneurship at Ukraine-Moldova American Enterprise Fund.

Who can participate:

• Founders with technical and engineering backgrounds, tech and particularly AI enthusiasts;
• Entrepreneurs looking to transition into tech;
• Bright students and scholars;
• Individuals who have worked in startups in various roles and are ready for their journey;
• Experienced professionals with strong domain expertise and insight;
• Repeat founders.

The program offers:

• Connections with advanced international ecosystems in Europe, the UK, and the USA;
• Access to investments within the program;
• A community of like-minded individuals and learning from successful founders and mentors from 100+ leading tech companies and startups.

Learn more about participation conditions, selection stages, and program opportunities via the link. Applications are open until August 12, 2024, inclusive.

Registration will continue until August 1, via the registration form. The final will be held on August 10, the winners will receive grants for the further launch and development of projects. The result of the team’s work can be a presentation of ideas, own technological solutions, demo-prototypes, entire services, applications or platforms.

Who can participate?

Both individual specialists and whole teams are invited to join, including:

• developers, engineers, and network architects;
• cyber security specialists, researchers and scientists;
• students, graduates, and young specialists in the technological and cyber security fields;
• specialists with experience in the energy sector;
• startup founders, project and product managers.

Participants are encouraged to start with new ideas and projects, but you can also join with existing ones.

About Cybersecurity Innovations Hackathon:

The Cybersecurity Innovation Hackathon will be held in a hybrid format with an online part for teamwork and an offline final on August 10 in Kyiv.

The hackathon implements the largest European IT competition DEV Challenge with the assistance of the Ministry of Digital Transformation of Ukraine and the support of the USAID Project “Cybersecurity of Critically Important Infrastructure of Ukraine”. The Hackathon supports the Ukrainian Startup Fund and the first innovation park UNIT.City.

Additionally, in June 2024, Open Data Hackathon was held in Kyiv with the support of the Ministry of Digital Transformation, the “Support for Digital Transformation” project with the support of USAID and UK Dev, as well as the executive partner SocialBoost. Winners received a prize of $143,000.

AIN.UA researched how the private investments of young people have changed over the past few years, the reasons for those changes, and why we should save for our future pensions right now.

When and why do the youth start to invest?

According to the AIN.UA survey, which had 82 participants, most people begin investing at the age of 21-25 (34.6%) and 26-35 (34.6%). People younger than 20 and older than 40 are less likely to make investments (5% each).

Over the past ten years, based on my experience, many more young people started thinking about investing,

Halyna Trytiak, a Financial Advisor, said AIN.UA.

She noted that people continue to invest or only begin to invest even though Ukraine has not experienced stability in recent years.

“Under stresses and risks, we tend to care about our future. People started saving more during the pandemic and are now considering investing. Generally, we think less about resources during stable periods, and more likely, we would think of security at unstable times,

Trytiak explained.

The respondents had different opinions regarding the influence of the full-scale war on investments:

• 31% stated the full-scale war had no influence on their intentions to invest;
• 26% admitted that war negatively influenced their wish to invest. About a fifth of them see no perspectives in investing in Ukraine;
• 20% answered that the full-scale war positively impacted their intentions to invest, and one-third of them made the first investments in their life.

Where do young people invest?

The most popular investing goals, according to AIN.UA survey, are:

Cryptocurrencies

Compared to the previous investor generation focused on real estate and deposits, the current youth prefers to invest in stocks and cryptocurrencies, the founder of the Simeinyi Budzhet, a financial literacy project, and a partner at iPlan.ua, Lyubomyr Ostapiv, emphasized.

So, the respondents recalled low entry threshold, accessibility, and high profitability as the main advantages of cryptocurrency investments.

Cryptocurrencies seemed to be the fastest and easiest way to multiply your capital,

said a survey participant, Roman, a QA Engineer.

He started investing in cryptocurrencies in 2021 after mining Ethereum for two months. His first $1,000 was invested in diverse coins: ETC, Solana, XRP, Luna, Matic, and Ada. He spent another almost $4,000 on a mining farm.

Roman continues investing in cryptocurrencies, while many of his contemporaries find it only a backup option.

Speaking of cryptocurrencies as an asset, it becomes more attractive when increasing value. When it decreases, all the hype also disappears. So I wouldn’t say many investors regularly go in and out,

Halyna Trytiak summarized.

She calls cryptocurrencies one of the riskiest assets with the lowest substantial base and asks to pay attention to such high-risk investments.

Despite all their popularity, Ukrainians don’t show a general trend to save in cryptocurrencies. Only 13% of the survey participants prefer this kind of saving. Most Ukrainians, 93.9%, prefer the US Dollar, 53.7%, the Euro, and 41.5%, the Hryvnia.

Stocks

The second most popular investment target of AIN.UA readers is company stocks. It is a long-term saving plan, Lyubomyr Ostapiv stated.

Ukrainians invest more in foreign companies because of apparently lower risks. That interest in foreign stocks has been stable for a few years already.

Clients are mostly interested in Eurobonds of Ukraine or blue chips — Apple, Microsoft, Tesla, etc.,

said Yevheniia Hryshchenko, Deputy Director at ICU Group, in an interview for Minfin.

In early 2022, foreign securities grew popular in Ukraine since people could purchase them via mobile banking apps. However, the trade volume decreased with the beginning of the Russian full-scale invasion when Ukrainian regulatory bodies temporarily paused the trade.

First, there were transaction amount limits: Ukrainians could transfer not more than UAH 100,000 a month to foreign broker accounts. In May 2022, the regulator entirely forbade external transactions to buy securities, stocks, and bonds and pay broker fees.

In August 2022, the National Securities and Stock Market Commission lifted most equity and commodity market transaction restrictions.

“The equity and commodity markets worked manually during the first five months of the full-scale war. The regulator monitored and analyzed the results of each permitted transaction. It would be nonsense in a peaceful life, but the war brought new circumstances. Thanks to that individual approach and conservative politics, we have managed to overcome panic, save assets, and avoid defaults for several securities,” 

A PHP Engineer, Mykyta, started investing in stocks of foreign companies even before the full-scale war. He had to choose a broker available in Ukraine. “There were Interactive Brokers. There was also Freedom Finance Ukraine, which, however, had Russian roots and was already fucked up at that moment.

About Freedom Finance Ukraine

Freedom Finance Ukraine is a company owned by a stockbroker, Timur Turlov, who holds Russian citizenship. Sanctions were imposed on the company in 2023. According to the EP, the total value of the assets blocked on the company’s accounts—shares and bonds of more than 280 issuers—is UAH 3.5 billion.

I chose Interactive Brokers for their protected complicated registration process, equity protection up to $500,000, and access to many tools.”

Mykyta invested mainly in US-based companies over NYSE and NASDAQ. Initially, he traded via Exchange Traded Fund (ETF) and later purchased separate stocks.

I have invested in SCHD, AAPL, COIN, Alphabet Inc. (GOOGL). At that time, the shares of Apple cost me much less. And now they are at the peak level [$208.14 on June 25, 2024 — edit.]. In addition, I invest in dividend funds and buy stocks on hype, which means the most spoken and growing securities at the time. In January, it was CoinList. The most recent one is Nvidia. Or I can invest in some perspective area, for example, related to AI. In general, my portfolio contains preferably technology companies,

said Ruslan Mahomedov, the Director of the Commission, about lifting restrictions.

With the beginning of the full-scale invasion, Mykyta stopped to invest for some time and had to sell most of his portfolio. Later, he resumed his trading activity and almost caught up with the volume he had before. Now, he invests in stocks and cryptocurrencies, plans to invest in real estate and not rely on known domains anymore.

Domestic government bonds

As of April 2024, nearly 178,000 Ukrainians invest in the domestic government bond (DGB) market, 90% of which are military bonds, according to the National Bank of Ukraine’s statement for AIN.UA.

For Tetiana, who works in the digital advertisement industry, an investment in bonds was the second in her life. Before this, she invested in her boyfriend’s company once.

I decided for the bonds to help our army quickly and conveniently, via monobank, and most safely, as it could be during a war,

she explained.

Her motivation to invest was to help the Armed Forces of Ukraine. “My boyfriend, for instance, had invested all his savings in military bonds even though he could purchase stocks of foreign companies. However, risks were not a case here,” Tetiana added.

The ROI of bonds decreases due to increasing inflation and interest rates, Halyna Trytiak explained. However, the existing ROI is high enough to cover the inflation and UAH to USD exchange devaluation. A low entry threshold is a pro. You can start investing with only ₴1,000.

Experts recommend looking at corporate bonds as an alternative. For example, NovaPay and !FEST Coffee Mission, a part of !FEST Holding, issued their corporate bonds. The NovaPay bonds are available via its app.

The bonds of !FEST Coffee Mission are fixed to the US Dollar — it’s an innovation in the Ukrainian market,

said the founder of the Simeinyi Budzhet financial literacy social project and a partner at iPlan.ua, Lyubomyr Ostapiv.

Halyna Trytiak emphasized that the corporate bond market in Ukraine develops because Ukrainians willingly purchase bonds to support businesses they like.

Why do pension investments become more and more popular among young people?

17% of the respondents indicated their concerns about pensions as a reason to invest.

The government can guarantee only minimum social welfare (in 2024, it’s ₴2,361 — edit.). But for more, you must work as long as possible. The First Deputy Minister for Social Policy, Darina Marchak, stated this in a live stream at Espreso.TV in June 2024.

According to her, the demographic situation in Ukraine is critical: one taxpayer works to pay pension one pensioner. “And this situation will highly likely get worse,” the Deputy Minister for Social Policy added.

It is due to the war-related negative migration, the low birth rate that decreased even more during the full-scale Russian invasion, and high early mortality because of warfare.

“Ukraine must be an active longevity nation. We must be interested in and work as long as we can and retire when we feel no physical capacity to work,” thinks Darina Marchak.

Lyubomyr Ostapiv recommends officially working employees to think about long-term pension investments. He noted that people ideally should save for 20 to 30 years. Compound interest, a result of an accumulation from a principal sum and previously accumulated interest, would work better for such a long-term deposit.

Non-state pension funds

The experts advise non-state pension funds (NPF) to invest in private pensions. It is a long-term investment. You can conduct a contract with the fund for several years and pay contributions to your own pension account.

There are traditional risks connected with NPFs: How reliable an NPF is and whether it can offer a ROI more than the inflation rate,

Oleksandr Panchenko, an Advisor of the National Securities and Stock Market Commission Director, said in his commentary for AIN.UA.

He recommends paying attention to how long a fund operates, what its partners are, if they are well-known, etc.

Then, compare the ROI for past years with inflation rates. “If a fund could overcome inflation in a long-term perspective (over ten years in a row), it is worth your attention. There are such funds in Ukraine, and usually, the more assets the fund has, the better the numbers,” Panchenko summarized.

There are 63 officially registered non-state funds in Ukraine, and 58 are active nowadays. After January 1, 2024, non-state pension funds lose the status of financial entities and become organizations under finance service regulations.

Here are the largest Ukrainian NPFs by assets:

• OTP Pension (since 2009) — ₴550 m, 64,000 members;
• Privatfund (since 2004) — ₴428 m, 51,000 members;
• Ukreximbank Fund (since 2005) — ₴394.4 m, 6,000 members;
• Emeryt Ukraine (since 2006) — ₴278 m, 70,000 members.

An alternative can be bank deposits (a possible contra is taxed income) and pension life insurance, Panchenko added.

After planning long-term investing, Roman began investing in MetLife — one of the largest global providers of insurance, annuities, and employee benefit programs, represented in Ukraine with the MetLife PJSC — in his 25.

“I have a 50-year agreement,” Roman explained. “I pay one thousand Hryvnia monthly, plus inflation. So, my recurrent payments will increase with time. The total investment should be around UAH 500,000, which will become ₴1.2 million in 50 years.”

Other international life insurance companies also work in Ukraine: UNIQA, GRAWE, or PZU.

The pension system of Ukraine. The context

The pension system reform started in Ukraine in 2003 with the passing of two bills: “On Compulsory State Pension Insurance” and “On Non-State Pension Provision.” It aimed a shift to a three-level system.

1. Tier 1 is based on solidarity and subsidizing principles. The current pensioners are paid with companies’ and employees’ Pension Fund contributions. Working people’s contributions should also pay the next generations of pensioners.
2. Tier 2 represents an accumulation system of compulsory insurance. The contributions are invested on the contributor’s behalf. The amount of contribution shall not exceed 7% of salary. Retirement savings can be inherited.
3. Tier 3 is voluntary contributions to non-governmental pension funds. The pension fund creates an account on a member’s behalf and accumulates contributions from the individual, their employer, or the member’s family.

Ukraine has a mixed pension system today, where Tier 1 and Tier 3 are functioning. The second level had to pass in 2009, but it is still not working. The draft law “On Compulsory Accumulative Pension Provision,” according to which there should be compulsory accumulative pensions, has not been adopted by the Ukrainian Parliament yet and has remained there since 2021.

In 2023, Prime Minister Denys Shmyhal of Ukraine announced a pension reform that should make solidarity pensions not less than 30% of the average salary of an employee during his life, plus a cumulative component, that Tier 2 component, possible.

The Advisor of the National Securities and Stock Market Commission Director, Oleksandr Panchenko, believes that the launch of Level 2 this year is plausible.

He underlined it should not be about fast paying of contributions. Ideally, it would be a topic for the time after the victory in the ongoing war, stabilization of the economy, and at least two years of building the required infrastructure.

We have been speaking about the launch of the 3-level pension system for 20 years. The longer it takes, the fewer citizens make pension savings, and the lower pensions — solidary and cumulative — they get in the future,

A faster de-shadowing of the labor market can be a benefit of an accumulative pension.

“An accumulative pension is formed from pension contributions and income from their investment. The higher the pension contributions, the higher the pension payable,” explains Oleksandr Panchenko. “Pension contributions are paid from the official salary. If it is low, contributions will be negligible.”

He adds that the accumulation reform will encourage people to get officially employed rather than receive salaries “in envelopes” because their pensions will depend on the amount of official payments.

Even if there were no absent Tier 2 and no demographic crisis, the Ukrainian pension system would still have many problems. Debts for pension recalculation are one of them. State’s debt under court decisions has grown to UAH 66 billion, Darina Marchak said on the Chronicles of Economy podcast.

The debt is related to court cases of ex-military and law enforcement officers. They are subject to special pension legislation that links their pension payments to the current amount of remunerations or salaries of active military and law enforcement officers. The debts also apply to payments to Chornobyl victims.

Other challenges include a possible sharp increase in the number of pensioners. Currently, the Constitutional Court is considering a case on the legality of raising the seniority requirements for retirement for specific categories of citizens. It is a reform adopted in 2017 by the government of then-Prime Minister Volodymyr Groysman. The Verkhovna Rada increased the retirement age: For example, if a person does not have enough work experience at 60, they must work another 3-5 years to qualify for a pension higher than the minimum. De facto, this government decision was equal to a retirement age increase.

If the retirement age requirements amended in 2017 are ruled unconstitutional (and the process is still ongoing), the number of pensioners in Ukraine could increase by tens or hundreds of thousands. Economic Pravda, citing calculations by the Ministry of Social Policy, notes that additional spending on pensions could reach UAH 10.5 billion a year.

Financial literacy of young people

According to the study “Financial Literacy, Financial Inclusion, and Financial Well-Being in Ukraine in 2021,” financial literacy in Ukraine has improved in past years.

Ukrainians aged 25-34 and 30-59 are the most financially literate. The least literate are young people aged 18-19 and over 60.

There is no correlation between gender and awareness: Ukrainian men and women are equally knowledgeable in financial matters (12.3 and 12.2 points, respectively). At the same time, there is a connection between the level of financial literacy and education: The higher the level of education, the higher the financial literacy score. In the AIN.UA survey, almost 95% of young investors reported having a university degree.

Ukrainians are more likely to develop financial literacy by themselves, as the older generation did not teach them how to invest wisely.

According to financial consultant Halyna Trytiak, this is due, in part, to the negative financial experience of the parents of modern youth.

For example, in the 90s, many Ukrainians lost money on the so-called “savings books.” Because of this, parents taught children not to trust financial institutions. Today, under capitalism, the playing field has completely changed, and behavior has not adapted. Still, some people dramatically distrust banks,”

the expert believes.

“All I knew about finances was that “you have to have something behind your soul.” As my grandfather says, you have to save for a rainy day,” Roman, a survey participant, answers the question about financial literacy in the family. Before investing, he worked overtime at several jobs for a long time because he knew he had to use every opportunity to make money.

Another participant, Mykyta, has almost the same situation. “My family had no rules of financial literacy at all, and even saving money was difficult,” he says.

In general, the country’s economic stability also influences the level of financial literacy, Halyna Trytiak emphasizes.

Since independence, we have not had long-term stability in the financial sector for more than five years in a row,” she explains. “Regular devaluation of the Hryvnia, inflation, revolutions, and the full-scale war affect the sense of security and the ability to plan for the long term, for example, for 10-20 years,

Even before the full-scale invasion, according to the study “Financial Literacy, Financial Inclusion, and Financial Well-Being in Ukraine in 2021,” Ukrainians focused more on short-term plans and spending than saving. However, almost 47% of young people surveyed by AIN.UA are ready to invest long-term — for five years or more.

The trend of spreading financial literacy is positive, says financial expert Halyna Trytiak: “Nowadays, young people actively engage in personal financial literacy and teach their children to do the same. There are also financial literacy courses for children and teenagers. Over time, this will ensure positive results.”

Investment tips

Consider your own goals and planning, and only then consider investment prospects. “The correct sequence is to determine your financial goals, whether they are short- or long-term, and what level of risk you are willing to take,” says Tritiak. “If the goal is short-term, up to a year, and you are planning a long-term investment, for example, five years or more, then you should decide whether it is appropriate at this stage.

Analyze investment opportunities: the entry threshold and conditions, the possible investment amount, and taxation conditions for residents or non-residents.

Consider agricultural land as a long-term investment. “Ukraine has great prospects in the agricultural sector. It is both an option that generates passive income and an asset that can grow in value in the future,” Trytiak says. However, she adds that one should take into account the entry threshold: for agricultural land, it is several hundred thousand hryvnias.

Pay attention to public investment based on the REIT (Real Estate Investment Trust) model.

• Swedfund is a financial institution established by the Kingdom of Sweden. Their mission is to fight poverty by investing in developing countries. Investments are made in energy and climate, healthcare and to reach small and medium-sized companies.
• As a public company, Swedfund is managed by the Swedish Ministry of Entrepreneurship and Innovation. The operations are financed in part by an injection of capital, which is the responsibility of the Swedish Ministry of Foreign Affairs, and by the return of funds from the own portfolio.
• Swedfund was founded in 1979 and has made more than 240 investments in more than 60 countries since its inception. In addition, it plays a key role in Ukraine’s reconstruction and resilience by providing long-term support, taking risks, and mobilising private capital.

Work assignments of the head of the investment office:

• Head of office and country representative;
• Generating local pipeline;
• Focus on networking, deal sourcing and deal preparation;
• Supporting transactions in due diligence processes and commercial discussions in cooperation with the sector teams in Stockholm;
• Follow up and evaluate existing portfolio companies in the country;
• Market Swedfund and participate in high-level meetings and interactions;
• Ambassador for Swedfund values and culture;
• Establishing relationships with other DFIs, MDBs and other relevant stakeholders;
• Monitor development and report to headquarters.

Requirements include:

• Relevant academic background, MBA, MSc or the equivalent advanced degree;
• Full proficiency in Ukrainian and English;
• Investment background, including with an international company/organisation with a least 10-15 years of relevant experience;
• Deep understanding of the local business environment and a broad local network;
• Experience in sourcing direct investment opportunities (equity and loans).

Applications are accepted until August 5, 2024. Applicants must be eligible to live and work in Kyiv. More details via the link.

AIN.Business has gathered information about Ukrainian businesses that are helping Kyiv residents deal with the consequences of the shelling.

Dnipro-M distributes gloves and tools to clear rubble in hospital

Dnipro-M, a Ukrainian company specialising in construction tools, is providing equipment to the people who are clearing the rubble of the hospital. Gloves are also being delivered to the nearest wards and to the site itself.

Social media user X @IamKrus has shared this in his post:

Socially responsible business is best manifested in times like these. There is @dnipro_m next to the Ohmadyt hospital. I ran in and said: give me all the gloves you have, we’ll sort out the money. They gave them to me, and after a while I ran back for more tools – they said that I didn’t have to pay for everything I took and that they were bringing more gloves from the nearest wards.

Water vending machines near Okhmatdyt are now free of charge

People can get free drinking water into their own containers at the following locations:

• Fora, 27 Vyacheslav Chornovil Street, BWT Aqua. Drinking water aquabox No. 4025;
• Fora, 16 Sholudenko Street, BWT Aqua. Drinking water aquabox No. 383.

Ukrainian business transfers money to Okhmatdyt’s account

Nova Post transferred UAH 1 million to the Children’s Hospital Charitable Foundation. The A-BA-BA-GA-LA-MA-GA and Vihola publishing houses donated UAH 400 thousand and UAH 20 thousand, respectively.

PrivatBank is allocating UAH 3 million to purchase the necessary equipment to restore the hospital’s destroyed building, as well as to purchase the necessary medicines and medical supplies.

Ruslan Shostak, co-owner of VARUS and EVA, also joined the fundraising campaign and donated UAH 1 million to the hospital.

ATLAS UNITED 2024, together with the Good Donations Children’s Charity Foundation, will donate funds to restore medical equipment. The fundraising was launched in June to buy medical equipment for the hospital, and now the funds will be used to restore it.

Ukrainian IT company Intellias has launched an internal fundraising campaign for UAH 400 thousand, and the company’s CEO will add another UAH 500 thousand.

Food and water from Ukrainian supermarkets for the victims

The Chairman of the Verkhovna Rada Committee on Finance, Danylo Hetmantsev, thanked the Ukrainian chains ATB, Silpo, Novus, Auchan, Varus, and Kolo, which responded to the request to provide water and food to the victims. “An hour and a half later, the trucks were on the spot,” Hetmantsev wrote.

Cafe Maria collects food for children’s hospital

Fruits, fruit puree, pastries, and biscuits for children can be delivered to the cafe at 26/41 Pavlovska Street.

Kyiv bakery Bakehouse to donate 50% of its proceeds to Okhmatdyt patients’ needs

More than UAH 150,000 will be donated to children under the care of the Tabletochki Charitable Foundation. The Kyiv bar BGRNY will also donate 50% of its profits to the Tabletochki fundraiser.

Dobrobut provides free assistance to victims of the attack on Okhmatdyt

All Dobrobut ambulance crews are working at the scene. Those who were injured in the shelling of the Okhmatdyt and need medical assistance can contact the reception departments at the following addresses

• 3, Simi Idzykovski str;
• 12A Mykola Bazhana Ave.

Accounts to help the patients and staff of the Okhmatdyt Children’s Hospital can be found here. As of 15:00, the hospital’s CF has already raised over UAH 19 million.

AVentures Capital investment fund has published its fresh survey of the venture and IT market of Ukraine for the year 2024. AIN shares the key details.

• In total, Ukrainian tech companies attracted $209 million in investments in 2023. Early-stage investments account for 38% of the total volume of investments in Ukrainian technology companies in 2023 (vs. 39% in 2022).

$209 million of investments are distributed in the following directions:

• EdTech. 41% — approximately $85 million (including GoIT and Preply)
• IT Services. 14% — approximately $30 million (including Trinetix and Viseven)
• Finance. 14% — approximately $29 million (including Stroom and Fintech Farm)
• Retail. 10% — about $21 million (including Deus Robotics and Competera)
• Entertainment. 7% — approximately $16 million (including Respeecher and Competera)
• Other. 14% — approximately $29 million (including Osavul and Haiqu)

The largest investments were raised by five companies:

• Preply — $70 million from Horizon Capital, Reach Capital, Hoxton Ventures, Owl Ventures, and others.
• Fintech Farm — $22 million from Nordstar and others.
• Dressx — $15 million from Greenfield Capital, Warner Music Group, The Artemis Fund, Slow Ventures, and Red DAO.
• Viseven — an undisclosed amount of investment from Horizon Capital’s Growth Fund IV.
• GoIT — an undisclosed amount of investment (may be as much as $15 million) from Horizon Capital’s Growth Fund IV.

In 2023, Ukrainian entrepreneurs received a total of $6.9 million in grant funds, the largest part of which was paid by USF, Brave1, and the European Innovation Council Accelerator.

Military Tech is a new growing vertical

• According to the research, Ukrainian miltech companies attracted $6.7 million in investments (including grants);
• Brave1 invested $2.3 million in Ukrainian defense companies;
• Osavul attracted the most funding ($1 million) among Ukrainian miltech companies in 2023;

Ukrainian funds continue to fill their budgets: total monetary liabilities amount to $532 million. Horizon Capital reached $350 million at the closing of its Horizon Capital Growth Fund IV, which took place on February 19, 2024 in Tokyo.

Also, in the spring of this year, the Ukrainian Venture Capital Association launched the Ukrainian Fund of Funds (FoF). The expected initial size of the fund is $300 million.

Also, in 2024, a new Ukrainian “unicorn” appeared — Creatio attracted $200 million with an estimate of $1.2 billion. Potentially “unicorns” can also become: Headway, BetterMe, Universe Group, Ajax, Restream, Welltech, Preply.

We talked to Yaroslav and discussed all his projects, the current demand for FPV drones, how autonomy modules increase their capacity, why automated robotic systems are the future, and why Telegram’s ban in Ukraine is needed.

Yaroslav, please describe all the projects you are working on now.

The Fourth Law is almost my 24/7 job at the moment. It is a manufacturer of autonomy modules for robotic systems. For FPV drones, in the first place. Our mission is to make such drones fully autonomous.

However, I am still an entrepreneur. I have a couple of businesses I founded that are still functioning under other people’s leadership, which give me updates from time to time so that I can report some news on social media. Then, I have a bunch of civil initiatives like Kremlingram, Spend with Ukraine, or an initiative to add Ukraine to the Civilization PC game.

It’s a lot of things to do. In any case, I spend about 70 hours a week on The Fourth Law. I am also the founder of Odd Systems, which is very useful for wartime. Hired managers run it most of the time, but I also dedicate at least four hours weekly to this project.

We know little about The Fourth Law. Please tell us about the starting capital for this company.

We attracted some investments in the last month, but I have been its sole investor from the very beginning. Our cooperation with investors is crucial not only in finances but also in the expertise, contacts, and experience they can share with us.

Can you name these investors and the size of their investments?

It would be best if you always remembered that in the case of Ukraine and drone-related technologies, we must keep a certain level of secrecy. Too much information can harm. That’s why we cannot go in public with all the details. I can only say that the operation is running.

OK. Please tell us more about the autonomy modules you produce at The Fourth Law. How do they work?

FPV drones can sometimes carry sensitive cargo, which can be interfered with by clutters. One day, you need to deliver a package over a forest or a mountain, which creates a radio shadow. Then, you need so-called last-mile delivery when a pilot knows where to deliver the cargo but cannot fly over there because of losing radio communication. Some systems allow for the capture of the point of delivery and transfer of control to the board computer at a specific stage of the flight. These are last-mile delivery systems. We produce them for our clients.

Another part of our work is to split pilot’s missions into fragments and automate as much of them as possible. For example, search for a point of delivery or navigate the return flight within 10 to 20 km and back to the base (or not). Some missions require the simultaneous operation of multiple drones. For this, we need the autonomy we are developing now.

We work with FPV drones, which are probably the most robotized platform in the world. Maybe vacuum cleaners can compete with them in terms of automation. As PCs or smartphones used to be, FPV drones have become a platform for many charming solutions.

Nowadays, FPV drones require much attention from talented engineers, as do all robotic systems. I am sure we will see autonomous robots completely replacing people in several areas of activity within the next ten years.

There are two technology megatrends. The first one is the evolution of semiconductors: they got smaller, more powerful, and more efficient. The second trend is the development of neural networks and technology, now called AI. Twenty years ago, AI meant entirely different technologies. Those old ones and the new ones meet each other in a bridge technology—autonomous robotics. I am sure it will soon cause a critical shift in such multi-trillion industries as transport or agriculture, as the Internet changed access to information once.

In Ukraine, this area is essential for upgrading our defense capability. So, attracting as much attention from engineers and entrepreneurs as possible is crucial not only in the near perspective but for the next decades. Robotic autonomous technologies will also affect the defense capabilities of Western nations, Ukraine, and the world economy. That is why I started to deal with them.

So, The Fourth Law works for the defense capability of Ukraine now. And in the future, you plan to expand to new markets, including civil applications, right?

Exactly.

Have you already started working in this direction?

We started a pilot integration with a US-based FPV drone producer. They seem happy with that, and we will deliver new products together.

Odd Systems manufactures FPV drones in addition to autonomy modules. What were the sources of financing for this project?

My savings.

Do The Fourth Law and Odd Systems work in tandem? Can your customers order drones with installed autonomy modules?

Yes, we cooperate closely there. It is possible, but we sell the modules as separate items and even franchises to some clients.

Have your drones and modules already been used for their purpose? Do you collaborate with the government?

Yes. We also cooperate with Brave1 and other state entities. Everything is fine. Both companies are very young; both started with significant, daily growth results. Our current focus is to expand the scale. The issue of employee reservation against mobilization is on the table, as in many other companies. However, it will be resolved soon.

What would be your recommendations for beginner entrepreneurs in defense tech? Where to start?

If a guy has a decent idea, it is a great beginning already. In general, I think entrepreneurs should be curious and persistent. If you are a Ukrainian with business or engineering talents, ask yourself: What will you tell your children in 15, 20, or 30 years about what you did in 2024? Make sure you will remember that time with pride.

The Ukrainian defense tech community is open-minded, large, and resourceful. Here, you can always find people who share your ideas and help you take your own place. This industry is well appreciated not only in Ukraine but also around the world. So, it is like a gravity field to which the world’s matter bends.

Indeed, if you produce something valuable, you will always find funding, compassionate people, and options to make your ideas come true. An important thing to consider is that entrepreneurs should speak with the end users. It is a must in every industry, especially in defense tech. Unfortunately, I must admit that many still lack this skill.

There can be another situation: two engineers meet to create something, but they lack a product manager who will speak with users and think about how the product should be used, look, and pass all the way from a technological idea to the hands of end users. It can also happen that there are enough engineers but no entrepreneurs. And they are not able to build a solid business. If you don’t have a guy with a business background, find a partner with relevant experience who is ready to help. Then, some businessmen don’t look far enough. Their sight is limited to one or two years within Ukraine, while they must count in decades and worldwide.

When you finally get everything, you will find the required resources, funds, and specialists. And this will result in great value for the Ukrainian defense capability now and vast opportunities in the future.

We, as a nation, won’t live without threats. So, we must look forward. Look, learn, read. Speak with the people. And all will be fine.

Let’s discuss your other project, Kremlingram. It started as a volunteer initiative. Did it also require some investments?

We invested nothing in Kremlingram. It is more a project of journalist investigations that started in a Signal chat of a group of people who studied and discussed ties of Telegram with the Kremlin. That is how we named the project.

In general, Kremlingram began with my author columns on Ukrainska Pravda and Kyiv Independent. Later, more IT specialists, journalists, bloggers, state officials, etc. joined us. And last autumn, we launched a website.

We spent the last few months formalizing the Kremlingram project. Several guys, led by Nazar Tokar, have systematically worked on this. Recently, we also created BuyMeACoffee and Patreon profiles. We also raise donor funding to hire a few full-time journalist investigators to systematize content creation. We will also cooperate with foreign partners to develop alternatives for Telegram in Ukraine as soon as possible. We should also bring the idea to foreign partners, our government, and our citizens that Telegram is a Trojan horse in the pockets of 70% of Ukrainians.

How different are the opinions about Telegram in our society? Can they change radically and quickly?

Of course, we have seen some opinion shifts in Ukraine for the past twelve to eighteen months. I would say people became more cautious regarding Telegram. But it’s going not so fast, especially in the context of ongoing war and the scale of risks connected to this messenger. Just imagine all Ukrainians have their phones bugged. That is the scale of risk we are discussing now.

Sure, we cannot know for certain which level of access Russian authorities have to the application. But if so, the enemy would do everything to protect it. Unfortunately, Telegram has become a core of communication for us as Privatbank used to be at the core of our banking system. It is not so easy to cease using it.

Today, a set of essential activities go via Telegram — from news to FPV drone fundraisers and official state communication. You cannot just cut it all and block Telegram entirely. It would be a very complicated and non-motivated move that caused undesired destructive effects.

However, we can see a shift to alternative platforms that is too slow, even though GUR and SBU made statements about Telegram risks. And these risks appear in two dimensions. The first is social media and information distribution channels without content moderation, leading to spreading fakes, propaganda, and manipulations.

The second is Telegram itself as a means of media and communication. All messages are stored on servers and are not protected with two-way encryption. So, we can’t have any proof that this information is not read by anyone or won’t be read in the future. We don’t see any judgments from the state towards this app.

These judgments can be followed then by public statements of influencers and government officials who use Telegram and are gonna swiftly shift to alternative platforms. For example, the media would not close Telegram channels immediately but publish news on other platforms 10 minutes earlier than on Telegram.

However, despite the too-slow reactions, more and more people cease to use Telegram publicly. The trust is decreasing. And this trend will be only increasing. The question is how to speed up the process. If Germans managed to refuse to purchase Russian oil, Ukrainians could surely refuse to use Russian Telegram.

Do you think it will end up with a ban or a restriction on the level of law?

Exactly. The ban on Odnoklassniki and VKontakte was an absolutely right move from the perspective of national security. The same will likely happen with Telegram. But it should be a well-thought and step-by-step state policy of lowering the dependency of Ukrainians on a social network created, controlled, and loved by Russians. It is like that joke about a duck: It looks like a duck, walks like a duck, and quacks like a duck. So, maybe it is a Russian tool, isn’t it?

In an interview for AIN.Capital, the founder of Glovo, Sacha Michaud, and the director of Glovo in Ukraine, Maryna Pavlyuk, talked about the results and successes of the service in Ukraine and the CEE countries, talked about the telemedicine service, volunteer initiatives, as well as cooperation with Ukrainian startups. In addition, they discussed the PowerUp conference, which took place on June 18 in Kyiv and was attended by Sacha and Maryna, and also shared their impressions of the winners of the Glovo Startup Lab startup competition.

In June 2023, in a previous interview for AIN, you said that the company reached pre-war numbers in March 2023, and in May 2023, the company already saw growth. What are the current business figures in Ukraine percentage-wise?

Maryna Pavlyuk:

The growth has reached 23%, and by now, taking the run rate of May, it’s closer to 30%. The development is clear, the industry is not stagnating.

We have around 12,000 partners and more than 250 employees in Ukraine. Also, millions of users. Over the past years, we paid more than €20 million of taxes. Although we are not sharing the daily number of deliveries, there have been over 70,000 couriers that have done at least one delivery with us. In regards to our active fleet, we can’t really tell the number because it is not stable. In a week, we’re talking about 10,000 to 12,000 active couriers, which heavily depends on the demand of the market. Let’s say for the last half of the year, it was around 10% to 12% of growth month by month.

Of course, it depends on demand, but we still see the huge interest and the potential that we have on the market, in terms of new customers acquisition.

In the same interview, it became known that as of July 2023, Ukraine ranked in the top 5 among 25 countries where the service was present. Has this position changed?

Sacha Michaud:

Yes, it’s now the third on the list.

Compared to?

Sacha:

Compared to Spain and Italy. In that order.

And how does the Ukrainian market differ from Spain and Italy?

Sacha:

It’s a great merit to the Ukraine team to rank this high. Spain, where we were born, and Italy were the first two markets where we launched. In fact, Ukraine was the 20th market we launched. And it’s already in third place and still growing so quickly.

I think that there’s a lot more similarities between the markets than differences. In Spain and Italy we operate in more cities and a lot of smaller towns, whereas in Ukraine we’re in 37 cities. So here we’re not in so many smaller areas compared to them. And that’s the biggest difference.

We know that shortly after the start of the Russian war, Glovo launched a telemedicine service in Ukraine, the only country in the world at the time. Was this launch successful and was it possible to expand this service to other countries?

Maryna:

It is a very niche service. There was not a big business idea behind that. We were believers. At the time, we saw the need to support the community, which the telemedicine services allowed to. So we opened it nationwide and you still can access the service. Our main goal was to allow people to get very quick access to the qualified consultation online. I cannot say that it is big now. It is still quite niche, however it allowed us to expand the service to home appliances repair.

In terms of the other countries, I know that the teams tried to launch it in a few other markets. The service can be added if you have good partners and customers, as such services are heavily dependent on the people. For us, it’s super important to deliver good user experience, that’s why we don’t exaggerate the numbers. We prefer quality over quantity. 

Sacha:

The good thing about our app is that we have hundreds of thousands of users connecting every day. So it’s very easy for us to add and test out different services. I think the services that we launch in the future will primarily be related to delivery or, at least, to our partners, stores and restaurants, and digitizing retail businesses. But it doesn’t mean we can’t run services like telemedicine where they’re very useful for our customers.

Still, our core business that will drive growth will be around everything related to our restaurants, stores, and supermarkets.

Given the resilience that Glovo demonstrated in Ukraine, how did your business continuity plan evolve between the period of COVID, the first days of the war, and afterwards?

Sacha:

COVID was a big moment for us and our industry. Many of our countries initially closed down, which allowed Glovo to be an essential service to the economy. We were oxygen to restaurants and stores who couldn’t have physical customers. Still, it was difficult because timetables changed and it was a very strange situation to manage those operations. COVID also educated the market a lot on everything that wasn’t only restaurant food. I think it was a great moment for consumers to get used to other things, especially supermarket-bought items. And people continued using the supermarket delivery even when the pandemics finished. Although the time was difficult, at the same time, for certain industries, it was quite beneficial.

Moving forward to the Russian war in Ukraine. We initially closed down the app in every city across the whole country. Firstly, the team carefully assessed the situation. Seeing that our couriers were trying to do deliveries themselves using Telegram and Messenger, Maryna and the team advised us to reopen, which we did within 24, 48 hours in the cities which were safe to operate.

Secondly, we built some tech solutions which allowed us to switch off a city and cancel orders, which let the customers and couriers know immediately. And now we monitor the cities we are operating in, make sure that they’re safe and we keep them open. And if a city is in trouble [Air raid alerts and curfews — ed.], we close down the services.

Maryna:

On the one hand, operations are quite difficult, but on the other we have learned to be very agile in many ways, like adopting the global technology to the local needs and issues that we have from day to day.

Since the beginning of the war, Glovo has taken a fairly active volunteer position, helping businesses at the frontline with free shipping and investments. What volunteer initiatives do you support or endorse now?

Maryna:

We started doing these projects to make a difference. At the start of the war, we started receiving many self-volunteering ideas and programs from our team, for example, delivering critical medicine to people who couldn’t leave their homes. We also had a lot of products in our grocery stores, which we started giving away to the people in need. The same goes for our cloud kitchens across the country, which started preparing food for our soldiers, doctors, and for people in need. There have been a lot of small and big ideas.

Afterwards, this evolved into a more shaped program. We partnered with all the key funds in Ukraine, United 24 being our biggest partner, with whom we have another big project coming up. The total amount that we managed to donate to various charities and people, over the past two and a half years, is over €1 million.

Sacha:

In terms of global initiatives, we have our Impact Fund. Basically, we assign a small amount of money per order to this impact fund globally, and, doing millions of orders every week, it slowly accumulates. We can later invest these money into relief funds, like the one in Ukraine, where we help our couriers and partners if they face any problems. Ninety percent of our partners are small stores and restaurants, and we try to help with their business growth, as it can help us grow, too.

As it was said, we’ve donated over €1 million in different initiatives since the start of the war. And we’ll continue doing the good thing on an even bigger scale, because this fund grows at the same speed as the business.

In an interview for AIN.UA, Choice co-founder Volodymyr Olyanitsky said that his startup closely cooperates with Glovo within the Glovo On-Demand service. Can you tell us about how Choice or similar companies work with Glovo?

Maryna:

Basically, Choice is one of the integrators of Glovo On-Demand. Glovo provides the technology for small businesses in order to help to work smoothly finance-wise and operational-wise through a simple interface. Apart from Choice, there are lots of different brands that we are also working with through Glovo On-Demand. 

Sacha:

It takes a lot of money to create a full cycle delivery business, starting from restaurant production, lead generation, and then delivery. Sometimes it requires even bigger investment than opening a restaurant. And, as Glovo is an expert at what we do and we have an operational fleet, we decided to support these initiatives, in order to build on our loyalty channels. It’s also beneficial to us, as we get more partners and order volumes coming through the direct integrations of the Glovo On-Demand by our delivery partners.

Two years ago, Glovo announced downsizing of global teams. How is the company doing in other markets now? How did the company manage to optimize its internal processes to overcome the crisis?

Sacha:

I think similar thing happened across all tech companies. There was a phase of very high growth where we wanted to invest in the growing businesses, which meant investing in our channels, marketing, but also in people. What we’ve been doing the last year and a half, is really focusing on profitability. Many of our markets are already profitable [Ukraine is among those countries — ed.], but we still have a lot of markets which are still growing and not profitable. 

We’re also planning to become profitable in H2 this year as a company, nine and a half years after starting. This means a lot of things, but above all, it means optimizing our technology and increasing the efficiency of our teams.

In addition to Ukraine, Glovo operates in other CEE countries such as Poland, Romania, and Moldova. Can you share how the business is doing in these markets?

Sacha:

We’re extremely excited about this whole region, Central and Eastern Europe. It’s one of our fastest growing areas. We’re the market leader in the region. Of course, not all the countries are as big as Ukraine. However, Romania is also one of our top five markets, with the rest growing rapidly. We’re super excited about the results there and in the rest of the region.

Looking ahead to the second half 2024 and beyond, what are Glovo’s short and long-term goals and projections for the CEE markets and Ukraine?

Sacha:

There are two areas that we really put our focus on. The first one is growth: expanding the number of cities that we operate in. And the second is getting more partners in, for example, quick commerce, to offer our customers an even bigger choice of goods.

We’re planning to also focus on our other services, like the one we talked about, Glovo On-Demand, or, what we call it, “logistics as a service”. Being a tech enabler, helping digitalize our partners and being a great ally to them — that’s probably where growth is going to come short term.

Regarding other services, an ideal plan for us would be to start working with payment plans. Or becoming our own wallet. I think there’s great opportunities, especially in countries where we’re the market leader and we offer a lot of value. We can probably align with other local companies and do things together. And Ukraine, obviously, would be an ideal candidate.

Maryna:

There are a lot of things that are in the development stages at the moment. And Ukraine, of course, despite the current macro factors, is still the country that is great for testing new services. I don’t want to spoil anything, but there are interesting things that will definitely require more time and partners.

Sacha:

And we’ve got some cool stuff coming up in the app. You’re going to like it.

Now, let’s talk about the PowerUp conference, which took place in Kyiv on June 18. What was the motivation behind the creation of this conference? What goals did you want to achieve?

Sacha:

Helping Ukrainian startups with visibility, especially at a European level, is our main goal. I think, to have a larger impact, we should be attracting more scale-up companies to come to Ukraine. And this conference is a good opportunity to tell large international tech companies as well as investors that they can still do business and grow; that they should be investing in local startups and creating jobs for people here because it’s a really good and profitable idea. I think the kickoff event really helps with raising awareness about the real state of the Ukrainian startup ecosystem.

Can you share with us the results of the conference?

Sacha:

The first part of the conference consisted of three panels that brought together heads of Ukrainian technology companies, institutions and venture funds, representatives of state institutions, as well as industry experts in discussions on the following topics:

• How to start a company and scale it outside of Ukraine;
• How to manage a company in Ukraine despite adversity and have a successful business;
• Why is it still profitable to invest in Ukrainian companies and develop talents?

At the end of the panel discussions we were joined by the Minister of Digital Affairs of Ukraine Mykhailo Fedorov, who closed the ceremony as the final speaker. In fact, last time I met him, we talked about how we need to raise awareness outside of Ukraine about the fact that the businesses are still working here, despite many things happening. Of course, it’s difficult, there are many missile attacks every day, but people are getting on with their lives. And the most important thing right now is that we really invest in the economy.

As we know, the highlight of the conference was the Glovo Startup Lab competition, which Glovo organizes every year together with USF. Please comment on which startups took the winning places, what awards they received?

Sacha:

There were a total of nine finalists at this year’s Glovo Startup Lab [UTU, Banani, Birb, GetOrder, Getpin, Howcow, Releaf Paper, ToGether, Uspacy — ed]. At the end of the conference they presented their solutions, and we the panel judges decided on three winners:

• First place received €20,000 in funding + internship in Barcelona — Getpin, an online marketing tool that helps businesses with physical locations attract customers looking for products or services nearby.
• Second place: €10,000 funding + internship in Barcelona — Uspacy, a CRM system for small and medium-sized businesses.
• Third place: €5,000 funding + online mentoring from Glovo — Howcow, anAI system that determines the best time for cows to conceive and detects health issues.

And can you share your impression on the winners of the conference?

Sacha:

There’s huge potential in them. They’re very early on, so I do think they need guidance and help, like all other startups. I think great companies are built by great people who work hard, who just are persistent. And above all, these companies are going to grow because they have great teams, great leadership, and great ideas.They’re not going to grow because someone holds their hand. It’s super exciting and I think it’s going to be a great experience for both them and us. 

To my mind, in general, companies that are built in Ukraine have a great opportunity to expand very quickly in the region and be leaders in the region. I think entrepreneurial talent is unique in this country, while technology levels are extremely high. When I came here  three months before the invasion, I really felt that Ukraine was moving in the right direction. I think Ukrainian society has great tech awareness, how you embrace new things, which is quite unique compared to most European countries.

Based on past experience, how does Glovo plan to support startup winners after the competition? Are there plans for ongoing mentoring or partnerships that will help to, possibly, integrate their solutions with Glovo services?

Sacha:

First of all, apart from the money they also receive our mentoring. We can help them through our ecosystem, our partner network, and our data. We have big access to the venture capital network and to a pool of talented individuals. Obviously, we’ll help the winners as much as we can.

Concerning the latter part of the question. Generally, one of the things we don’t talk a lot about is the amount of local companies we end up partnering with doing such different things, like giving solutions to our couriers. As an example, we just mentioned Choice, or other similar companies, or even fintech. It can be a whole wide range of services that we can plug into our network. There’s always opportunities for great companies to work with us and us with them. I think it’s the key to success.

Also, related to startups. We have a project called Glovo House, which incentivizes our employees to start their own companies based on their ideas. This can ensure that our legacy is not just Glovo. Already, close to 100 startups have been founded by ex-Glovo employees. Most of them received good funding, so they’re already on the road to potentially get bigger than Glovo.

The project focuses on these main areas: 

• Verification of the project. If anyone presents a project, we can look at it and, based on our experience and network, help them to redefine the project a little bit better. 
• We can give them access to our network of capital, either through local funds, angels or crowdfunding within the company.
• And then of course awareness. Glovo is a well-known brand in pretty much every country we operate. So we have easy access to channels to raise awareness about any new startups our employees come up with.

Any words in conclusion?

Sacha:

Personally, it’s amazing coming here. It’s my sixth time visiting Glovo in Ukraine since we launched here. I was super energized to arrive. And also the team here is an example for the Glovo globally.

• In total, there are more than 240 companies working in the field of artificial intelligence in Ukraine.
• Among them, the most famous Ukrainian startups are Grammarly, Preply, and People.ai.
• Since 2019, two Ukrainian AI companies have become “unicorns” (Grammarly and People.ai), and the three largest Ukrainian AI startups are valued at more than $14.5 billion (Grammarly, Preply, and People.ai).

One of the key factors of Ukraine’s success in this field is the growth of the number of specialists in the field of AI, which has grown fivefold in ten years. The current number is reaching 5,200 professionals as of January 2024.

• Nevertheless, the number is quite small compared to other IT specialists. Ukraine has the second highest number of IT specialists (307,000) among CEE countries, while the number of AI specialists is still less than 1%.
• The most prevalent age group among specialists in the AI/ML industry falls between 21 and 25 years old.
• Data Scientists and ML Engineers stand out as the predominant professions among specialists, representing 63% of all professionals in the AI industry. Notably, these fields offer the highest average salaries among all IT specializations in Ukraine.

According to Ukraine’s Minister of Digital Transformation Fedorov, in order to increase the number of specialists, 106 educational programs in AI have already been opened in Ukraine. He also noted that a key step for training strong specialists should be establishing cooperation between universities and AI companies so that students have access to practical knowledge and experience.

Dmytro Dubrovskyi talked with the Editor-in-Chief of AIN.UA about how the fund will operate and where and how much they are planning to invest.

Dmytro, not long before our conversation, you have released a statement about Uklon Co-Founders’ first big-check investment in a defense tech startup called Buntar Aerospace. Can you share some details of this deal with us?

We have invested $200,000 in a seed round. The startup produces vertical take-off and landing surveillance UAVs that can fly for 60 km and intelligence-mission planning and operating software that automates a UAV operator’s planning effort by 90%. They are currently being tested on a training ground and soon will be their first combat use.

If I am not mistaken, was it your first external investment as Uklon Co-Founders? Or did you mean Defense Tech?

We didn’t invest in external companies, but this year, we decided to open such a track and raise $2 million within our fund for defense tech development in Ukraine. The average check is $200,000 to $500,000. We are interested in startups during seed rounds. Now, we plan to get 8 to 10 companies in our portfolio.

Are you going to invest in non-military startups as well?

Not now. We have a clear goal at the moment.

Have you used private funds for this foundation, or did you also invite some external investors?

It was only private funds of co-founders from Uklon dividends. We invested in the foundation according to our company shares.

Buntar Aerospace was only the first company in our portfolio. Now, we consider another ten projects that passed due diligence.

What requirements do you have for defense tech startups? Do you prefer software or hardware projects? How important is having the BRAVE1 status?

Having the BRAVE1 status is very useful. We also expect that a startup will raise an intelligence component. So, it should not be limited to FPV assembly of Chinese parts supplied by the state or volunteers.

We look for unique tech advantages. That’s why we consider hardware plus software. We also appreciate when startup products have already passed a testing stage and are prepared for combat use so that we can receive feedback from military units. And the third point is secure sales.

In any case, we also study the project team. We check whether there is a legal structure, the financial statements are clear, etc. If not, we can consult them on optimizing these processes.

Do you participate in product development elsewhere than in consulting and financial support? Maybe you share your expertise in sales or development?

For sure, we can share our expertise. We might give a hand of help in marketing, sales, and back-end development. In addition, we have a long list of contacts, including deftech developers, military, and volunteers. We can aid with testing, getting feedback, and developing the product. However, we are investors in the first place, so finance is our primary contribution.

Do you seek advice from the Ministry of Defense or the General Staff regarding startups you would invest in?

We have no ties with higher military command, but we may always request feedback from some famous volunteer funds and formations involved in testing.

We have friends in the Ministry of Defense and Special Forces, too. So, a lot of feedback flows to us from different sources.

Let’s speak about Uklon. Recently, you have exited Azerbaijan. Did it change your expansion plans somehow? Which markets are you going to enter next?

In one way or another, the war influences our plans. Indeed, the joint co-founder’s investment in defense tech is of value from the perspective of emotions and national consciousness powered by a desire to invest in Ukraine’s victory. Expanding into new markets became a bit complicated for our product.

We don’t cancel any of our plans, but there is no need to rush. We are developing Uzbekistan and successfully pushing a Russian competitor from the stage there.

Indeed, we have left Azerbaijan due to a tense situation with unpredictable legislation changes. Our local partner also decided to cease investing in this country.

Recently, Uklon joined the Diia City special taxation mode, and it was relatively late compared to other product companies. How satisfied do you feel about it? What benefits and underwater stones do you see?

Actually, we like it very much. We also joined the Diia City United Association, which aims to preserve the rules of this unique space.

Can you comment on the consequences of the newest claims anonymous Telegram channels published against Uklon? Did you find out what and in whose interest has it been done?

Most likely, in the interest of exacting money. One day, we just decided not to dig deep into that kind of pretty typical media attacks, which became more and more usual, unfortunately. You can see both businesses and politicians attacked. Sometimes, such media activities are accompanied by law enforcement bodies’ actions. Now, we are focused on building a defense strategy for the event of new attacks.

Do you participate in side projects besides the Uklon ecosystem?

I am involved in the Defense Builder Accelerator as a mentor. We will share our experiences with startups so that they are ready to comply with our investor requirements.

Speaking of GR as one of the Diia City United Association’s functions, a member of which you are, what would be the most painful problems Ukrainian businesses face nowadays, in your opinion, as the ecosystem member? Is the government attentive to your concerns?

For instance, there are ongoing discussions about the necessity of employee reservation from the mobilization. In particular, Oleg Gorokhovsky, Co-Founder of monobank, posted on this topic on Facebook. What do you think about this?

For sure, employee reservation and a more transparent mobilization procedure are the things the businesses are lacking. There must be an option to reserve key employees at least to keep the company working. I like the concept of employee reservation by MP Dmytro Natalukha.

I understand that such a decision would be unpopular among our people, but our country really needs it. Hopefully, the government will act in favor of this instead of only raising taxes. It looks simple on the first look. However, many don’t see that the economy would shrink without employee reservation, and the businesses would not survive, especially by having to react to all those blackouts.

Should we meet again in a year; what news would you like to share with me? What strategic goals do you want to achieve?

I dream that Ukraine would be victorious then, and defense tech startups supported by us would grow into big companies and unicorns. The whole world saw the aggression of an autocracy and its imperial ambitions. So, NATO member states and other democracies have to invest more in the defense industry.

I also would like to speak with you about new markets Uklon entered as a truly international company.

As a civic union, Techosystem is governed by its Statute, certain regulations and has established governing bodies: General Assembly, Head of the union, and Board of Directors. At the meeting held on May 30, Oleksandr Yatsenko, Principal of SMOK Ventures and Managing Partner of BRISE Capital, was elected as the new head of the union.

And the new members of the board are:

• Oleksiy Yermolenko – Co-founder and partner of Flyer One Ventures, representative of Genesis;
• Andriy Zaikin – Founder and CEO of YEP Accelerator;
• Andriy Zinchuk – Founder and Managing Partner of ZAS Ventures;
• Olga Ksyonzenko – Director of Relations with Government and International Institutions at Sigma Software;
• Victoria Nalyvaiko – co-founder and CEO of BazaIT;
• Oleksiy Orap – founder and development director of YouScan;
• Mykhailo Rudominsky – co-founder of Himera, Promin Aerospace;
• Svyatoslav Svyatnenko – founder of Mission Possible;
• Denis Sychkov – Director of Horizon Capital;
• Artem Starosek is the founder of Molfar, the owner of AIN.UA.

Currently, the organization has 76 members, being the largest association of technology product companies and venture investors in Ukraine, according to the press release. It was founded in 2022.

The new board is obliged to manage Techosystem and ensure effective management of the organizational processes of the union. Kateryna Grechko, the executive director of the organization, and the team are responsible for operational activities.

The previous board included: Valeriy Krasovskyi — Sigma Software Group, Oleksandr Yatsenko — BRISE Capital, Kyrylo Mazur — Center42, Yevgenia Bespalova — Ukrainian Bridge, Dmytro Nikiforov — Vacuum DeepTech Acceleration, Kyrylo Latysh — Genesis.

• The decision to open a new enterprise has already been made, said the general director of the company, Roman Shшmonov. According to him, Ukraine has a powerful infrastructure, which remained after the collapse of the USSR and is not used effectively.
• He said that Ukraine has “cheap electricity, labor, production chains that are now being built, many people with higher education”.

When recruiting Ukrainians, we see a big difference compared to people from other regions, where there is no production culture,

the general director commented.

• Roshel employs 200 Ukrainians who are refugees from the war and want to return home. They are to be employed in a new enterprise in Ukraine.
• The company’s main product is the Senator armored vehicle, 1,140 of which have been delivered to the armed forces at the expense of partners and Ukraine.

The fund is also chaired by Rui Falcao, co-founder of COREangels, a global community of angel investors, startup mentors, entrepreneurs and industry experts. He will ensure quality and process control.

• Angels for Ukraine brings together Ukrainian and international business angels.
• The fund will invest in innovative projects and promising startups.
• In addition to providing funding and resources, it will also help them grow and enter the international market.
• Investors will have access to the COREangels global network of active business angels from around the world.
• With COREangels capabilities, investors can invest through local portfolio funds.
• Investors will be able to directly influence the selection of startups for investment, evaluating their potential and prospects.

The fund will operate on a permanent basis and the first meeting of the investment committee will be held on July 5, 2024.

Startups seeking funding from €50,000 to €500,000 can apply via the link. The deadline is June 21, 2024.

Business angels are also invited to join the committee and support Ukrainian entrepreneurship. To do so, you need to fill out the form.

• The fund was designed back in 2016, but it took years “to harness difficulties and reach a point of readiness”. It allows to invest capital in local funds through an intermediary. This is not a donor or charity program.
• FoF plans to launch an ongoing program aiming to strengthen the private investment, venture capital, and technology ecosystem in Ukraine. The main goal is to become the first institutional anchor investor to provide 30%+ Limited partners commitment, so that general partners have more chances to attract the remaining 70%.
• Currently, there are 16 Ukrainian funds that are actively raising money and are the main goals of the Fund of Funds. Together, they have a total investment potential of about $800 million.

Among them are:

• AVentures Capital;
• ICU Ventures;
• Freedom One VC;
• Digital Future;
• Flashpoint;
• One Way Ventures;
• FfVC;
• Ukrainian Phoenix;
• ZAZ Ventures;
• Network VC;
• 3X Capital;
• Flyer One Ventures;
• SID Venture Partners;
• 1991 Ventures;
• Rada Capital;
• Green Flag Ventures;

The FoF structure is fully independent, without government involvement. In the future, however, a state may invest in FoF on par with the rest of the participants. The Ukrainian Fund of Funds is led by Manager Ertan Can, a venture capital fund of funds pioneer in Europe, and Founder and Managing Partner of Multiple Capital. 

About Ruta.vc

• The fund’s team includes two people: Dmytro Bondarenko, the general partner of Ruta.vc, who is also the general director of the LIGA group of companies, and Olena Pshenychna, the managing partner, an entrepreneur, and business angel.

During my active career as an investor and entrepreneur, I saw the number of requests to the market in sports technology. And this is an incredible amount. I saw what a voluminous ecosystem can be built. Due to the large number of international connections, there is an opportunity to help our projects reach the international level,

Dmytro Bondarenko, the fund’s general partner, said.

• The fund will focus on software and hardware projects at the pre-seed and seed stages, that is, already showing sales. Partners of the fund will also provide mentoring and incubation assistance.
• Ruta’s team didn’t disclose specific check amounts. According to its website, $22 million was invested in sport tech across nine projects.

The sport technologies sphere is not only fitness applications with a virtual trainer or gadgets. These are sports business management, augmented reality, Esports, statistics for sports and working with data. The trend is growing in the world. In 2023 year, 34 new funds were launched. And we want to be the guide that will help Ukrainian startups enter international markets and be a solid platform for them,

Olena Pshenychna commented.

About Liki24

• Liki24 is a healthtech company that develops a platform that aggregates medicines from thousands of pharmacies, offering fast delivery and accessibillity. It was founded in 2017. Now, the company is valued at up to $50 million.
• In 2021, the startup launched in Romania and Poland (the latter office has been shut down), in 2022 – in Italy. The platform reached 200,000 users in Romania in 2023. According the co-founder Anton Avrynskyi, the turnover on these markets increased by 100% in 2023.

Launch details

Liki24 has announced the launch in the German market after testing its services there for three months and achieving operational profitability. To enter the new market, the company invested $100,000.

The test period was successfully completed, and the service is already used by thousands of people throughout the country. So, from now on, Liki24.com in addition to Ukraine, is available in three EU countries: Italy, Romania, and Germany!

Anton Avrynskyi, the CEO & co-founder of Liki24.com, commented on his LinkedIn

AIN‘s English-language editor-in-chief, Rostyslav Sobachynskyi, spoke with the company’s co-founder, Dmytro Dubilet, about the recent investment, the company’s main plans, the entrepreneur’s other projects, and the future of the Ukrainian fintech industry.

Let’s start with the recent $32 million investment. How did you manage to raise such an amount?

The deal followed several hundred meetings with potential investors. It was quite a long process. This investment is a combination of Round B and Round B Extension, which took almost a year to complete. And when we received the last portion of the investment from the Bank of Georgia, we decided to share this information with the world.

How does the “Neobank in a Box” model that your company currently operates differ from other BaaS (banking-as-a-service) providers?

If we look at our competitors, perhaps the company that is most similar to us is a neobank in the UK called Starling Bank. They recently launched a sister company called Engine. This is almost the only company with a business model similar to ours. Because most technology companies in this market offer one or more of the solutions you need to run and maintain a bank. We offer a solution that consists of almost 30 to 40 software suites that you do not have to buy from the outside. These are back-end complexes, from CRM to anti-fraud, from a program for managing plastic card balances to a customer support service. And, of course, the key is our mobile application, which in itself is often a key driver of customer loyalty.

The uniqueness of our offering is that it is a truly comprehensive solution. In addition, there are specific banks that have already implemented it and become successful. Our first project was Leobank in Azerbaijan, where we actually became one of the market leaders in a year and a half.

You mentioned that Fintech Farm is different in that it provides operational support rather than regulatory or infrastructure services. Why did you choose this approach and what are the benefits?

In an ideal scenario, of course, we would like to create our own banks and launch them in different countries around the world. But that is impossible because you need a banking license in each country. That’s why we decided to take a key aspect of digital banking startups — technology, which is 80% of success — and sell our product that way.

Our model assumes having only one exclusive partner in each country. And we dream of being represented in at least 50 locations in the next 5-7 years.

Fintech Farm cooperates with banks based on a performance model. What does that mean in practice?

We have a formula that calculates what we get from this digital bank based on operational and business metrics. First of all, the number of customers.

This is not a revolutionary model; in fact, it is used by many vendors, including in the technology industry. If we came in and sold our solution to any bank for a fixed fee, it would be much more difficult.

We have a very simple message: “If your bank and Fintech Farm roll it out, your bank will become super successful.” And we are willing to take the risk that it will become successful.

This often finds a positive response among potential customers. After all, if you come and just sell them a solution and ask them to pay several million dollars for it, it would be difficult for them to take the chance. We say, “Let’s start everything together, and if this bank is successful, we’ll get the main revenue for it.”

Much has been written about the launch of Leobank in Azerbaijan and Liobank in Vietnam. What other markets have you entered and have you managed to gain a strong foothold so far?

To date, we have only fully launched in the two countries you just mentioned — Azerbaijan and Vietnam. A year and a half ago we had an unsuccessful attempt to launch in Nigeria, we quickly closed the business because we couldn’t come to an agreement with the local banks [couldn’t find a full-fledged partner – ed]. On the other hand, Vietnam started very well and we decided to focus on that market.

I would like to say in advance that this year we are launching in two Central Asian countries. It will be Kyrgyzstan and another country — I don’t want to name it now until we sign a formal contract. But we also really hope to launch in India this year.

Why did you choose India? And how exactly do you choose the countries you want to enter?

To be honest, we don’t choose just one country and don’t look at other countries. Absolutely all countries are suitable for us, except those that are part of the “Axis of Evil”.

But of course, markets have their own priorities, depending on the level of competition, the local fintech, the banking system, the size of the population, and many other factors. And according to these criteria, India and Vietnam have always been on our top list.

At one point, we went directly to India, met with many banks and found a very cool partner there. We have been working on this project for the last six months. Now all is left is to “dot all the i’s”, and we will finally sign the contract and announce it. We are very lucky to have a partner who has big ambitions for the Indian market based on our solution.

In terms of numbers, what are the prospects for Fintech Farm in India?

Our target customers are 200 million middle class people in India.

Do you have a strategy for entering a country and finding a strong bank? Or do you have a specific approach for each country?

Typically, when we enter a new country, we look for all kinds of contacts to communicate with those who make important decisions for banks. First of all, we communicate with medium-sized banks. Again, the message is very simple: “Let us do this for you, and you have every chance of becoming the big bank in your country.” And at the same time, we refer to the experience that we have.

On the one hand, there are some personal contacts, and on the other hand, Visa and MasterCard help us a lot with introductions in local markets. With me personally, they had the experience of cooperation in Ukraine, they cooperated with Fintech Farm in Azerbaijan and Vietnam. And they see that when we enter a new market, everything works for us — and this really affects the redistribution of market share among payment systems. We have a kind of deal with them: “If you help us get to know the banks, we will start with an exclusive contract [cooperation of newly established neobanks with Mastercard or Visa – ed.] It’s a win-win for everyone.

Speaking of experience, in your latest post, you noted that “a part of me regrets that I once left monobank to serve in the Cabinet of Ministers of Ukraine, only to be fired within six months”. What is your current relationship with the monobank team? Do you think about returning?

My relationship with the monobank team is excellent. They are my friends. But I have no will to return. If you have already left, what will you do here?

It was a very big decision for me. If you dare to join the civil service, it changes your life a lot. Both in the household and in the business aspect. This is a very serious decision about how your business life will change. For a long time, I could not dare, but when I was invited to join the cabinet, I accepted. In retrospect, it looks like a mistake. This happens.

And what went wrong with the civil service? Do you currently have a relationship with anyone in the current government?

No, I do no have any relationships left. Things did not go so well because the cabinet resigned. It’s not that I was fired personally, it’s that the whole government [Oleksii Honcharuk] resigned. This is a complex question that is difficult to answer in one sentence. Obviously, this government did not have good relations with the presidential administration and the parliament [according to the official version —because of the president’s loss of confidence in the prime minister due to the slow implementation of reforms, according to another version — because of the so-called Honcharuk tapes, in which a person with a voice similar to that of the then prime minister talked about the president’s “primitive understanding of economic processes” — ed.].

Your brother Oleksiy Dubilet has the largest share of 33.74% in Fintech Band, which is developing monobank. Do you often exchange experience with him?

Of course we communicate. That is, we communicate not only with Oleksiy, but also with [the co-founders of the project — ed.] Misha [Mykhailo Rogalskyi, — ed] and Oleh Horohovskyi. We exchange what we can so as not to harm other shareholders and partners. Although it’s so transparent now, to be honest [information about business operations — ed.]. If you watch Misha’s blog and read Oleg’s telegram, you can get enough insight into the business.

Let’s go back to Fintech Farm. How has the company changed since its launch in 2020? How did the start of the war in 2022 affect it? What has been accomplished in that time? And if you can share, what is the current valuation of the company?

Unfortunately, I cannot share the valuation. We have agreed with our Board of Directors that we will not disclose this information for the time being. Mykola Bezkrovnyi once shared a range. You can probably refer to these figures [according to AIN.UA, the company’s valuation exceeded $100 million as of April 19, 2023 — ed.]

In terms of how the company changed, in 2021 and 2022, we were just starting out, and we had nothing to refer to except the experience of one of the co-founders, which was me. And after that, in 2022, when it became obvious that the bank had become a resounding success in Azerbaijan, and then the solution had taken off in Vietnam, it became much easier to communicate with both investors and potential partner banks.

As for the war factor, of course it affected the business and all of us. Currently, due to our recruitment strategy, a certain part of our staff lives outside Ukraine, because it is important for both our partners and investors.

Despite all the good news, raised investments and successful projects, it is generally interesting to hear about the difficulties that Fintech Farm faced and how you overcame them?

I would say that the biggest difficulty is that when a potential partner or investor hears about Ukraine, they immediately think that it is an additional risk. After all, if a bank ventures into such a big project with us, it is a risk in itself, even without the war factor. That is why we describe the whole situation in detail and very openly, so that the partner is not worried.

I believe that we have managed to build such an organization that there is almost no operational risk for any, even the worst scenarios of war development. But of course this is a big factor. And it is even difficult for me to say how many rejections we have received from potential partners or potential investors because of this.

I’m not even talking about the fact that when the war started, I personally and many employees of the company were mostly engaged in volunteer work, not business. In the first 4-5 months of the war, I had almost no focus on business.

And what is the main challenge for Fintech Farm today?

I would say that the main challenge, as in any project, is the issue of implementation. In other words, how do we get up and running as quickly as possible with the resources that we have agreed upon with our partners beforehand?

We have a rule of thumb that we launch a new neobank in six months from the moment of signing the contract. And we have done a lot of work within the team to meet these deadlines, even when we are working on several projects in parallel. I would say this is the biggest operational challenge we face.

But we managed to build a very cool platform and an approach on how to customize it for different markets. I can say that we are able to meet these deadlines. We are even thinking about reducing the time to launch a new bank to only four months.

And how are your other projects — the business automation ecosystem Navkolo and the traveltech startup Flat Planet — doing? What is their current value?

There is no valuation for either of them because there was no investment involved.

Navkolo is part of the Checkbox project, which works with software cash registers. It is the market leader. It turned out to be a very successful project, at least in Ukraine. But now, unfortunately, I am not so much involved in it operationally.

As for Flat Planet, we’ve only just started. I don’t see it as a big project that will make us all rich. But we talked to my brother about starting it a long time ago. And actually, as soon as we started to make it, the war started and everything stopped. Recently we decided to try to finish it. Again, I’m not going to reveal the numbers at this time, but they’re not going to blow your mind yet.

Generally speaking, how do you see the future of the Ukrainian fintech industry and what is the place of neobanks in it?

The future of the Ukrainian fintech industry depends very much on the future of Ukraine. Now, of course, everything is tied to the war. When it ends, we will have a breakthrough. I hope. This will also be true for the fintech industry. But, now… it’s survival mode.

In conclusion, what future plans for Fintech Farm can you share?

We have two main aspects to work on:

1. Consolidate success in key markets and launch in India.
2. Open new markets.

We should be operationally profitable this year. And accordingly, the need to attract new investment will not be so urgent. We can focus solely on the business. And strategically, we have very big ambitions to create at least one cool neobank in every corner of the world.

In general, I think Ukrainian banking is very advanced. It was like that even before mobonank appeared. Ukraine really has a very cool experience that can be shared with all countries in the world. And we are using it: these are technologies and, above all, people who have worked in various banks and fintech companies with Ukrainian roots. And thanks to that, we really have something to say to the world.

This committee will be responsible for the implementation of Techosystem’s strategy for promoting investment in Ukrainian startups, developing partnerships with venture capital funds, and establishing interaction between startups and investors.

The Venture Investment Committee starts with the formation of a working group.

We moved from the request of active venture investors. The lack of an active independent platform for the interaction of market players and the implementation of projects for the development of the venture capital market in Ukraine became the basis for launching this working group. The list of initiatives launched by the union includes the list of the most promising startups of Ukraine and the Hall of Fame of the ecosystem, training scaleups together with Danish Tech Startups, the base of investors in Ukrainian startups and the defense-tech vertical, in particular, the development of the matching grants tool and others. In total, the group is currently implementing about 20 different projects,

Oleksandr Yatsenko, chairman of the Techosystem board and one of the initiators of the working group on venture investments, said.

The list of announced projects by the committee:

• Conducting monthly research on investment deals in Ukrainian startups and other market research;
• Building connections between Ukrainian and international investors and Ukrainian startups – attracting international venture capital investments to strengthen the international presence of Ukrainian startups;
• Strengthening links with venture funds, establishing links between the venture ecosystems of Ukraine, the EU and the US;
• Launch and operation of the Equity Crowdfunding Platform – a platform for expanding access to investment and stimulating economic development;
• Launch and operate the Matching Grants tool for financing Ukrainian startups – a public-private grant program that leverages the capabilities of private sector partners to support innovative technology startups by matching investments with grant funds.

The committee participants include:

• Investment funds: BRISE Capital, Flyer One Ventures, Geek Ventures, Horizon Capital, SID Venture Partners, Sigma Software Labs, SMOK Ventures, SMRK, u.ventures, ZAS Ventures;
• Accelerators and incubators: CfE Accelerator, Mission Possible, Startup Wise Guys, Vacuum Deep Tech Acceleration, YEP Accelerator, Zhytomyr Polytechnic Innovation Hub;
• Natural persons: Yaroslav Krempovych, Yaroslav Yakovenko;
• Other companies: Kooperativ, Molfar.

The committee was headed by Andrew Zinchuk, founder and managing partner of ZAS Venture Group, Ukrainian entrepreneur, investor, startup consultant.

I decided to run for the position of head of the Venture Investment Committee in order to unite the efforts of the entire Ukrainian technology ecosystem to achieve ambitious goals. My experience at ZAS Venture Group allowed me to understand the importance of joint work and investment attraction for the development of Ukrainian startups. Our big goal at ZAS Ventures is to create 30 new unicorns in Ukraine by 2034. Moreover, my vision is that about a third of these unicorns will be in the field of defense technologies, which are now being born to protect Ukraine. Achieving this goal is impossible by the efforts of a single actor, so I am striving to unite the efforts of the entire ecosystem to achieve this goal, which will directly bring us closer to victory and strengthen the country’s economy,

Zinchuk commented.

The direction of venture investments is one of the six key areas in the activities of Techosystem, the union informed AIN.UA. The other five areas of activity of the ecosystem are:

1. Education and standardization;
2. International relations and events;
3. Analytics and research;
4. Interaction with the state;
5. Service companies.

At the same time, Techosystem reported that with the expansion of its activities, the number of these areas will eventually increase to 12.

About Esper Bionics

• Esper Bionics is an engineering and technical company that manufactures bionic prosthetics. The headquarters of the company is located in New York, and the engineering, design, and production units are located in Kyiv.
• Esper Hand bionic prosthetics use artificial intelligence and cloud data storage. In 2022, it was featured on the cover of the Times as one of the best inventions of mankind. “It was a pleasant shock,” Anna Belevantseva, co-founder and COO of Esper Bionics, shared the editor of AIN.UA her reaction.
• In May 2022, the company launched the Esper for Ukraine program, which allows Ukrainian veterans to receive Esper Hand prostheses for free, and also provides amputees with support during prosthetics and prosthetic use.

The grant details

The allocation of the grant was announced during the visit of the US Secretary of State Anthony Blinken, when the civil servant, together with the US Special Representative for Economic Recovery of Ukraine Penny Pritzker and the US Ambassador to Ukraine Bridget Brink, came to the Esper Bionics production in Kyiv.

The head of Esper Ukraine and strategic relations at Esper Bionics Bohdan Diorditsa said that the grant will be used to upgrade the Kyiv production, hire employees and purchase highly specialized software.

In London, Nova Post opened two branches at once: mail (up to 30 kg) and cargo (up to 1,000 kg).

• Post Office for up to 30kg is at 42 Fleet St, Temple, EC4Y 1BT
• Cargo compartment up to 1000 kg is at Unit 7, Falcon Court, St. Martin`s Way, SW17 0JH
• Delivery time from Ukraine to Great Britain — from 5 days.

The cost of delivery from Ukraine to the Great Britain post office will be:

• documents up to 1 kg — UAH 900.
• parcels up to 2 kg — UAH 950.
• parcels up to 10 kg — UAH 1500.
• parcels up to 30 kg — UAH 2,500.

Customers can also order delivery of parcels up to 100 kg by courier to any address in England, Scotland, Northern Ireland and Wales. For a shipment of up to 30 kg, you will need to pay an additional UAH 100, and for every 100 kg of parcels, you will need to pay an additional UAH 250.

In the near future, the company promises to make it possible to send and receive parcels through the InPost network.

AIN had the opportunity to interview Denis and Viktor Gurskyi, brothers and co-founders of 1991 Ventures, discussing the fund’s activities in 2023 and plans for 2024, as well as talking about the CEE and Ukrainian markets.

Tell us about 1991 Ventures. What specific sectors or industries do you focus on and why?

We’re a sector-agnostic fund, incorporating priority and interesting areas into the fund’s strategy. 1991 Ventures has a significant historically accumulated experience.

Historically, 1991 began as an open data project. So, we deeply understand Government API and government services, as well as civiс tech. Among 1991 graduates, many companies have built their entire business on open data. Among them are Opendatabot, YouControl, Штрафи.ua. And as open data very quickly becomes big data, we also understand the specifics of working with big data projects with databases and arrays, and how various services are built on that. 

Then we worked a lot with fintechs: with MasterCard, Visa, the National Bank of Ukraine. 1991 supported various projects like platforms in areas of digital health, transportation mobility, clean energy. Accordingly, all these sectors can now be linked to AI+. However, we believe that AI is a superstructure over all industries, rather than a separate industry, as it permeates all industries.

We also understand the specifics of working with B2B, B2G sectors.

We believe that this question is not about which industry the startup comes from, but what added value the fund can offer. Today there are no problems with fundraising capital for any company with an interesting model.

You also emphasize supporting companies and startups that adhere to ESG standards and sustainable development goals. What is the mission and core values of 1991 Ventures?

We believe that the fund should provide, in addition to investments, a certain value. That’s why we don’t want to work with companies that the fund will only invest in and then watch how they are doing. We want to be a part of companies’ growth.

For example, we use our global network of contacts at the corporate, government, and international levels to match companies for further mentoring, partnership etc. If a startup deals with disinformation, we’ll gladly introduce them, for example, to NATO. If it’s a company offering corporate software, we’ll introduce them to Meta, Microsoft, or Google.

Tell us more about the fund’s creation process.

I think it’s better to call the fund not newly created but gained. Because its formation took a long time, which is quite rare for a fund mandated to work with founders from Ukraine. 1991 is an FCA regulated fund, structured in Ukraine. I remember when we were at the Web Summit in November 2022, and then, we already knew we had commitments to the fund. Then the structuring process took almost a whole year.

In the summer of 2023 during Ukrainian Recovery Conference and London Tech Week, we obtained the license. By that time, we had already set up all the documents, and the fund came into force in 2024.

And now, at the beginning of this year, we were able to announce it without any legal issues for us.

You did not announce any investments yet, but said about plans to invest in early stage companies. Tell us how you deal with the difficulties that arise at such stages?

Yes, there are no investments yet. Why not? Because the whole process is still being structured. It’s quite a large and complex historical process. It’s a full-time job for more than a year.

During the work on the fund, many people already knew about it, and we had many private meetings where we talked about future prospects and potential portfolio companies. This helped us build a network of co-investors, those who can invest after us, and those who invest at later stages. This also allows us to understand what form of fundraising to choose.

We believe that this is an important strategy to make such connections. For example, the UK-Ukraine Tech Bridge, an initiative of the British and Ukrainian governments, where an agreement was signed, and our team helped in its investment accelerator. As part of this initiative, 20 companies from Ukraine were selected to be mentored by British investors and will be showcased at London Tech Week.

In addition, it is worth noting that we collaborate not only with funds but also with various ecosystem organizations from Ukraine, such as the Ukrainian Startup Fund.

As for our stage-focus early stages, our fund focuses on investments in the amount of €200,000-€400,000. For the European market, these are small amounts, but if we talk about CEE, this is not an idea-stage startup, but already a startup with a valuation, probably of at least €3-5 million. And this means that this startup already has some validation from clients and organizations and has received grants.

What difficulties did you face during the establishment and operation of the foundation, in particular, in overcoming the cultural differences (and geographical chasms) between Ukraine and Britain? Have you experienced these differences?

It seems to me that the Ukrainian startup ecosystem is slightly corrupted by the American approach to venture capital and startups. In fact, Silicon Valley is corrupted because there is a certain misinterpretation of some principles. For example, the idea of thinking big doesn’t negate the need to be present, polite, modest, open, in terms of transparency. For local British investors we work with, the main thing is the issue of trust and the realism of various projections regarding the assessment of their company in the market. Perhaps this is a somewhat pragmatic approach, but it has more business grounds and requires honesty, or as they say, being a good citizen.

I also want to mention something potentially unpleasant for Ukrainian companies and founders: the fact that the whole world is currently supporting Ukraine does not negate the requirements for Ukrainian startups remain the same as for startups from any other country. Sometimes this line between what is possible and what is not blurs. When a foreign investor meets a Ukrainian startup, they simultaneously have a choice from many startups working in the same industry and not related to Ukraine or Eastern European countries. One must consider the competition that exists beyond the Ukrainian information field, especially when it comes to Britain.

You have been working as an accelerator since 2016. In your opinion, how has the market changed and is it now more difficult for startups to attract funds right now? Have the selection criteria changed for them?

Denis commented:

I don’t think the selection criteria have changed significantly. Of course, there are questions related to compliance, team, but it seems to me that, on the contrary, due to extremely unpleasant reasons related to Russian aggression, attention to the Ukrainian IT and startup industries has grown significantly. And when we talk about the early stages, it seems to me that at these stages, the focus is on the human potential and capabilities, and the talents of Ukrainian companies, which are outstanding compared to other startup teams.

The ingenuity of Ukrainian founders is impressive. Their emotional resilience and flexibility don’t come from the DNA of the company, they come from the person. And these characteristics give Ukrainian founders an advantage on the international stage. And I hope that because of this, Ukrainian companies will become successful because they currently have more representation abroad and exist in many different countries. For example, one founder abroad, and the team in Ukraine, or vice versa, founders in Ukraine, and the team in Poland. All these pirouettes and combinations will ultimately have a great, cumulative effect for the entire industry.

I hope that in a few years, there will be more such small funds for London, but very important for Ukrainian founders, like ours, appearing on an independent basis, as a result of successful exits of Ukrainian founders, or as an allocation of very large funds that want to pay special attention to founders from Ukraine.

Viktor added:

I want to note that in Ukraine, the full-scale invasion is perceived as an invasion directly into Ukraine, but in Europe, in Britain, it is seen as a war in Europe. And this, of course, affects the investment climate.

In 2022-2023, we saw a decline in the number of deals. Therefore, on the one hand, it’s difficult for us to launch a new fund in a crisis, but on the other hand, we understand – this is a very good moment because it has become harder to obtain investments for Ukrainian and Eastern European startups. We believe that 1991 will be a small stepping stone that will help alleviate this and impact the unfavorable conditions in the market.

Tell us about your team.

Before the full-scale war, we had offices in London, Kyiv, and Mariupol. Unfortunately, it has been lost.

In London, the team is small. Viktor and I are GPs of the fund, and we also had one person who left GP and became our advisor. We also have a group of advisors who represent a whole group of five organizations that help the fund in various aspects. We work with them on a regular basis. Global company Morgan Lewis helps us with legal issues,

Denis said.

In Ukraine, we are used to turning to lawyers when urgent issues need to be addressed. The support of a legal company in Britain is somewhat different because they are a permanent advisor on many issues, and they are liable for their work. 

We also have a separate group of advisors who work with us on fund management. The team in Ukraine is working to ensure the stability of the accelerator’s development and to contribute to the development of the ecosystem through events, programs, and so on.

1991 has carried out many programs, accelerators, and other projects in Ukraine, but legally not related to the fund because it is an unregulated activity, even abroad. Therefore, legally these are different things, but still, it’s one group of companies linked together by various elements, such as the brand.

Do you plan to expand, increase the team in Ukraine?

Yes, we plan to, but we cannot share this information at the moment. The only thing I can say is that the Ukrainian community is not limited to Ukraine; there are many powerful centers with Ukrainian founders around the world that have emerged. And we were interested in collaborating with these hubs, which would bring great value to the entire ecosystem.

Tell us more about your partnership with the British funds Venrex and Samos Investments. How quickly did you manage to raise capital from them?

We started working together about a year and a half before the first document was signed. However, informally, we quickly solidified our intent. They formally act as LP’s in the fund. It is worth noting that their role is not limited to financial investments since they are very powerful financial institutions with extensive expertise in the market.

Vendrex is a financial fund, a veteran of British venture capital, and an early investor in Seedcamp. Therefore, they understand well how startup platforms and accelerators transform into funds. And so, they often have something to say and advise.

Samos also once invested in Seedcamp and is an investor in Entrepreneur First. This is a quite powerful program that focuses more on founders rather than business ideas. Therefore, they have a slightly different worldview, but nevertheless, it is very useful.

There is a lot to say about Samos because it is an investment fund that has many different directions, including a separate structure represented by a private equity fund. They provide a lot of advice, expertise, and various connections.

Can you share some of your plans for the future?

One thing I’d like to mention is that the fund typically constructs its plans very simply. They mainly concern portfolio growth and work with the current portfolio. Therefore, these plans are usually not very interesting because the world learns about them when something happens with portfolio companies: they raise funds, or exit, or undergo M&A.

But we would like Ukraine to be sufficiently represented at London Tech Week this year so that the companies that fall under the UK-Ukraine Tech Bridge initiative represent the country. We want to attract the investment potential of the British venture capital community specifically for this initiative because the British government has a lot of contacts in the venture market.

Additionally, 1991 Ventures is an accredited member of the British Private Equity and Venture Capital Association. Through the BVCA, we also plan to develop certain initiatives related to Ukraine and Eastern Europe. Because our goal is to make it easier for Ukrainian companies to navigate in Britain and to establish this connection.

• On the night of May 1, russia attacked Odesa with ballistic missiles. Oleh Kiper, the head of Odesa Military Administration, informed that as a result of the missile attack, in addition to the depot, other civil infrastructure has been damaged. The surrounding houses have broken windows. 14 people were injured, one man was hospitalized and is in moderately severe condition.

• Fortunately, the attack didn’t cause any casualties, unlike the attack in October 2023. Back then, 6 people were killed and 16 wounded due to another russian missile.
• Today, Nova Post announced there were a total of 904 shipments worth almost UAH 3 million in the depot and office. Nova Post will inform customers about the status of their parcels. The company promises to provide psychological help to everyone who was on shift.

Parcels that were in the depot and in the branch and were destroyed as a result of the shelling, the company will reimburse according to the estimated value. Parcels that are on their way to this branch will be redirected to another branch. Detailed information will be available in the morning on our social networks and on the company’s website,

Nova Poshta commented.

The news about the attack comes just after Nova Post announced the opening of its first branch office in Barcelona at the address C/Gran de Sant Andreu, 413, Sant Andreu, 08030. Despite regular missile attacks in Ukraine, two more branches are planned to be opened later: one more in Barcelona and another one in Madrid, according to the CEO of Nova Post in Spain, Oleksandr Pavlovsky.

About London Defense Tech Hackathon

• London Defense Tech Hackathon brought together developers skilled in both hardware and software to foster innovation in defense, national security, and deep tech. There was a key focus on drones and their applications on the battlefield, both the hardware and the electronic systems needed to fly them to their targets and counter-drone systems.

• The event was organized by Alex Fitzgerald from Skyral and Richard Pass from Future Forces. The two were joined by co-organizers that included the Honourable Artillery Company, Apollo Defense, Lambda Automata, and the D3 VC firm among others.

Defense tech is a difficult industry to enter. And it’s a difficult market to break into, for obvious reasons. We’ve found hackathons an extremely exciting way for people to get involved because defense technology can seem like a giant black box of contracts that take 10 years, and technologies that are built hidden from the public eye. At a hackathon, you have 24 hours. Make something really cool,

Catarina Buchatskiy from Apollo Defense commented.

• The NATO Investment Fund’s presence demonstrated NATO’s commitment to European defense innovation. Patrick Schneider-Sikorsky, a fund partner, stressed the fund’s focus on collective defense and resilience solutions.
• Alex Flamant, an HCVC investor, emphasized the importance of European defense technology investment and demystifying the market for young entrepreneurs. The hackathon participants wanted to help solve security issues, including drone detection and monitoring.

AIN talked to Vitalii and discussed the company’s changes, as well as nine successful deals closed since the full-scale Russian invasion has started.

When you agreed on this interview, you said that InSoft.Partners would change the concept to a group-of-company format. Please tell me the conceptual differences from its current IT holding format.

I would love to say that it’s an old strategic vision with 15 years of planning, and we are implementing it step by step. I love telling such visionary things. But let’s be honest. We just saw another opportunity and started moving to it.

Eight years ago, we started as InSoft Capital. It was a different brand, a foundation. Later, however, we understood that this format was not that convenient. We are more than bold operationalists or classic investors. We are not the ones who like to bite small pieces from many companies as ventures do, for example.

Our concept is rather about private equity with a significant operational profile. So, we consequently transformed into an investment company and then into a holding.

Basically, we started with investing money of our investors. Later, we switched to joint investments with external partners. Then, we decided to spend only our own funds. Now, we use the money of internal partners to invest. And, of course, we continue testing new business models.

What benefits did we enjoy from a holding concept? We consolidated assets within one decision-making point. Why must we become a group of companies? Because it is an ecosystem with all its members’ expertise and a cost-effective structure. InSoft.Partners will be an umbrella brand of a higher level.

Thanks to this, we may now participate in tenders that are unavailable for separate companies. Now, we spend less on establishing foreign offices and purchasing stands at large exhibitions. We apply cross-sales within our group and exchange knowledge between companies and their divisions. Our Lead Generation and Finance teams pretty long organize joint meetings and work united on many projects.

How many companies belong to InSoft.Partners’ portfolio at the moment, and how many employees does the group have?

Currently, it’s eight companies. Seven are in the main portfolio, and one is in the accelerator we started in an MVP format. The number of employees is about 700.

What is InSoft.Partners worth now, in your opinion? The last figure I heard was $40 million.

Naming a figure is complicated nowadays. Look at the current situation. Unfortunately, many international funds or strategists we know say Ukraine is not a place for investments today. Under such conditions, an M&A with some foreign partners would be a coincidence. And, unfortunately, it is usually about discounts or something like that.

So, any company evaluation would be far from reality and sound like a myth.

Still, if you want me to name you a figure calculated based on some math or finance, I would say that, according to our current margins, structure, market share, and operations, speaking about the group as a whole, including previously considered multipliers, we could have grown 1.5 times from the previous estimate of $40 million [to $60 million—edit.].

Nevertheless, it is only a figure. Only closed deals matter.

So, we are only playing with numbers now?

Yes.

You mention an important thing about investor fears. What are the three most significant risks of investing in Ukraine?

Even one reason would be enough. People who are not aware of the everyday events of this war create too many fairy tales. In fact, our image of the war also changed several times, and it continues to change.

Our Western partners were full of emotions at the beginning. Now, it’s rational thinking. For the first six months of the big war, we experienced a compassionate wave of their support and help: donations, contracts, new customers, etc. Some old clients also came back to resume our cooperation. Then, everything started to shrink. Life goes on. The corporations have their quarter and annual plans and middle-term strategies. They think about investments and bonuses, not emotional one-time support but balanced decisions. It is hard to explain to your board members that you didn’t fulfill your plan because your contractor lived an entire week in a blackout and couldn’t visit you for the last two years because he might not leave his unit.

Another fun observation is that nowadays, you can hear that Westerns got “tired” of news about the war. In my opinion, it is in the past now. As I spoke with my foreign partners in 2023, they really could wonder, “You did not sign peace yet, really?” Yes, they indeed asked me this. So now, most of our counterparts never mention the war and simply calculate potential losses from cooperation with Ukrainian companies and local restrictions.

That does not sound optimistic, but thank you for the real picture. Let’s return to the company. You privately told me earlier that the CEO of Inoxoft, Liubomyr Pohreliuk, joined your pool of investors in January 2024. Can we suggest that you are now in the middle of a story of your company and other businesses that joined your ecosystem through syndicated operations can invest in deals of the group?

That’s an interesting topic. Based on my observations, a businessman who builds a working and profitable business that doesn’t grow anymore will eventually feel bored. All these entrepreneurial extremes turn into routines, such as endless Groundhog Day, and the entrepreneur gets eaten by the routine.

Actually, we created a way for our partners to look beyond their routine operations and switch to investor relationships with us. We applied the current business model with Inoxoft longer than others, made plenty of changes, and established deep business relationships. That’s why we tried to expand the partnership format with them specifically.

With Liubomyr, we sought a potential target, conducted negotiations, estimates, and trades, and closed a deal. It all resulted in a new company in our portfolio, Rolique. And Liubomyr was not a passive investor here since he had been deeply involved in strategic and operational process development. Now, the whole group watches Liubomyr’s professional transformation and helps him because other partners are interested in switching their roles similarly.

You also mentioned syndicate. We discussed creating something like this because not all partners are ready to enter other businesses on the operational level. However, they are interested in co-investing. It’s all about finding an investment model that would be useful for all of us. Maybe we will create an internal corporate fund with interested partners.

Tell me about your evaluation procedures regarding companies you invest in.

We look at the essence of a business and check whether it has severe problems in its structure. If it doesn’t, we seek low-hanging fruits, the processes to solve pretty quickly to increase its revenues.

During the screening, we look at founders. We very appreciate an effective partnership. Every day, we work together. And such a personal connection and mutual understanding and vision are keys to a long and complicated way.

We look at companies with 100-250 employees. We can lower our expectations for a niche business or one that can quickly take over a niche.

It should be a developing company that is profitable and oriented toward Western customers. As always, we are interested in leaving the founder in charge, but we are also very close to the control share. So, we used to buy 30% of a business, but now, our appetite has grown to 49%.

In February, you also used the option to increase your share in Noltic.

To be honest, I think we did this before, too, but without a systematic approach. And after Noltic, we add such options to the contract. It’s a win-win because this option is effective for buyback deals. A buyback is when the founder can buy our share if we find our partnership non-convenient for both parties. In such a case, we wouldn’t hold our part of the business and exit pretty easily, saving good relationships with the founder.

According to this concept, we purchase smaller shares at the beginning. Because, in the case of a buyback, the founders could struggle to buy their part back. However, if a partnership works well during some time, we use our options then. It’s what we did in Noltic.

At the beginning of our conversation, you talked about an internal accelerator. Remarkably, some market players started developing their own accelerators. Tell me the conditions of how to join it.

You should know that our project is not a classic accelerator. One day, we got an idea that we could help grow both companies we used to—with 100-250 employees—and smaller ones, with 40-50. That is what we call acceleration. We share our experience and support through training, routine building, and, sometimes, branding. However, our work within the accelerator differs from our core business model. To start cooperating with our core companies, you should first go through the accelerator and grow.

Our readiness to test such an approach and the Perfsol founders’ wishes matched. I believe it is a win-win. If we win this story, it will be a win for both sides and a new opportunity for the small service company market.

Only IT companies can be candidates for acceleration, right? Or are you ready to try other domains, too?

It is the second option. I believe in niches, and we will go beyond the service IT domain. Our knowledge about lead generation, business development and operations, and the ecosystem we are building would be relevant for other niches. It is only a matter of time.

How do united teams work now as a group of companies? I remember you merged lead generation and helped each other with legal expertise. What else is there?

Yes, our lead generation and finance teams work together every week. Other teams have done it ad hoc so far. We have a small internal university our trainees attend to learn quickly on real cases. The same goes for finances—we solve non-trivial issues, for example, how to open a bank account for an Estonian entity. Everybody who has done this knows how painful it is. But together, we managed to solve this.

We also use the umbrella brand to participate in tenders. Competing at tenders is a known problem for small Ukrainian companies, up to 200 people. But if they apply as part of a large group of companies, with all its strengths, they will at least meet formal criteria.

So, if you have a small business with up to 150 employees and want to open a foreign office, it means many complications and costs for you. You must find a physical office, negotiate, understand how to hire and work with people in this country, pay taxes, consider cultural differences, etc.

But if you have eight companies in one office, it all is much easier. It is cheaper since the costs are split between all, making them irrelevant on the scale of a single company. And then, you have an expertise multiplication effect with every player aboard.

Speaking of foreign offices, where are you currently present outside of Ukraine? 

Our companies already have their own small offices in different countries. What’s different about the current project is that we will immediately open such offices under a common brand, where dozens of people will work together. This will be more interesting for clients and the team. Because for partners, the logic here is based on the principle: “It does not matter if you want. You have to.” More and more clients are requesting cooperation with at least a part of the team outside Ukraine. Accordingly, we realize that this is a crucial step for us to develop further. 

We are now opening our first office in Poland, in Wroclaw. We will continue to move forward according to the Agile principle: depending on how the first office performs, we will decide on locations, size, and timing.

Today, you said that a serial entrepreneur is always about a different routine. Speaking of InSoft.Partners, what is the next milestone you see for this project? 

There will always be a routine. Maybe I didn’t make my point clear enough. Jumping from one dopamine game to another also raises questions. First, you need to make an MVP out of an idea, then a system, and scale it. But then the system will have to be improved. Of course, somewhere later, you can hire managers. However, everything comes in due time.

As for milestones, first, we need to establish a process where the founders of the companies from the group will systematically contribute to the group’s expansion, as Liubomyr from Inoxoft did. Secondly, we need to resolve the issue of the corporate fund because our partners have such a desire, and it would be logical to keep the money in the system. Thirdly, we need to test the idea of our accelerator. Fourthly, we need to go beyond the classic service IT. 

Next, we shouldn’t forget about our foreign offices because if the concept works, we will have an exciting way to become more and more international. Then, we will move into another league when we start investing in expansion through a leveraged buyout mechanism. 

About Quantum-Systems and its operation in Ukraine

• Founded in 2015, Quantum-Systems specializes in the development, design, and production of small Unmanned Aerial Systems for security, defence, public safety, commercial, and GIS operations customers. The company is headquartered at Special Airport Oberpfaffenhofen, with business locations in the US, Australia, and Ukraine.
• Quantum-Systems have been in use in Ukraine since May 2022. So far, 212 systems have been made available through the German Enablement Initiative. In Ukraine, the company already operates a local service, support, training, and logistics center with 25 Ukrainian employees. They train drone pilots and implement technological advancements in the reconnaissance systems directly on site.

Ukraine has trusted our systems since the beginning of the war. With our own plant, we want to express our trust in Ukraine and our conviction that the future of drone technology is being written here,

Florian Seibel, CEO of Quantum Systems, commented.

Plans for the future

• The plant opening took place on 18 April in the presence of the Ukrainian Minister of Strategic Industry, Olexander Kamyshin. It will employ around 100 people by the end of 2024. Quantum Systems also plans to invest up to €6 million in the plant over the next two years.
• By the end of the year, a total of 500 Quantum Systems reconnaissance drones plans to have been delivered to Ukraine. The new production facility is expected to increase production capacity to up to 1,000 drones yearly including spare part production.

• SoftServe’s internal research found that AI tools can increase the productivity of development teams by up to 45% and reduce project development time by 30%
• Currently, AI is being used in nine pilot projects for clients from various industries, including the financial sector, manufacturing, and retail.
• The teams prepared for the new work approach for 1-2 weeks, undergoing special training on the use of AI tools.
• The first results showed positive dynamics. Software development time reduced by 20%, Quality Control — by 25%, Test Automation — by 20%, creation of technical documentation — by 17%
• SoftServe uses the following AI tools: GitHub Copilot, CodeWhisperer and Duet AI for programming, ChatGPT, MS Copilot 365 for working with texts, and NEO Platform, an enterprise web platform based on AI.

In addition, the company is developing AI assistants for certain specializations. Assistant for software architects helps to work with documentation and strategizing projects, automating and improving these processes, increasing the productivity of architects by up to 30%.

By the end of the year, the company plans to scale the use of generative AI while continuing to explore new tools and formats.

About SoftServe

SoftServe is an IT company operating in the field of software development and consulting services. More than 11,000 employees work in more than 50 offices located from San Francisco to Singapore.

The main offices of the company are located in Lviv (Ukraine) and Austin (USA). The company works on more than 900 active projects for clients in the countries of North America, the EU, and Asia.

SoftServe’s clients include such companies as IBM, Cisco, Panasonic, Cloudera, Henry Schein, Spillman Technologies and others. SoftServe is a partner of Google Cloud Platform, Amazon Web Services, Microsoft Azure, NVIDIA, and other major technology companies.

• The Czech Republic became the fourth country in Europe where Nova Post has opened its offices. The first city was Prague, where the office was opened on June 5 of the same year. At that time, the company announced that it plans to invest 3 million Czech crowns in development in the Czech Republic.
• According to Andrii Artemenko, the CEO of Nova Post in the country, this year they plan to open offices in the cities of Pilsen, Ostrava, and Ceske Budejovice. And also increase the number of parcel delivery points.
• AIN reminds that Nova Poshta opened 89 offices in Estonia, Poland, Lithuania, Latvia, the Czech Republic, Romania, Germany, Slovakia, Italy, Hungary, and Moldova.

How does it work

The office is located at Dr. M. Horákové 11/76, working from Monday to Saturday. The delivery time is from five working days.

The cost of delivery from Ukraine to the Czech Republic:

• Documents up to 1 kg — UAH 500.
• Parcels up to 2 kg — UAH 550.
• Parcels up to 10 kg — UAH 850.
• Parcels up to 30 kg — UAH 1,800.

In addition, Ukrainians can order delivery by Nova Post courier of up to 200 kg from Ukraine to any address in the city of Liberec. Delivery by courier is paid additionally + UAH 100 for shipments up to 30 kg or + UAH 250 for every 100 kg. The company’s website has a special calculator that helps calculate the cost of the parcel.

• According to the agreement, Reticulate will become a supplier of Himera’s communications systems in the US and key global government customers.
• In a comment to AIN, the co-founder of Himera Radios, Misha Rudominski, said that the partnership with Reticulate Micro is an opportunity to combine unique Ukrainian expertise, with all variations and application conditions, and the experience of a large company.

We realized that combining our practices would help make a much better product — both for the Ukrainian defense forces and for the global market. The distribution agreement provides an opportunity to generate additional funding and revenue, which on the one hand will go towards expanding the team and improving the technology, and will allow us to continue to maintain the minimum price that we fixed at the beginning on the Ukrainian market. And, of course, taxes in Ukraine and foreign exchange earnings,

Misha Rudominski says.

• Also, the co-founder of Himera Radios shared that he expects significant revenues after entering the US market: “Potentially we are talking about millions, tens of millions of dollars and more in the long term.”
• Currently, Himera Radios communication systems will be used by the military. However, cooperation with other industries is planned.

Currently, our main focus is the Defense Forces of Ukraine, that’s what we were created for. Creating products specifically for other markets is a dispersion of our attention, which is why we offer a product to the global market that is minimally different from what we do in Ukraine. However, over time, we plan to work with the police, ambulances, rescuers, and firefighters

Misha Rudominski added.

• Previously, Himera Radios raised $525,000 in investment, which they planned to spend on increasing production and speeding up the release of new, higher-quality versions of products supplied to the Armed Forces of Ukraine.

About Himera Radios

The Himera Radios startup was founded in 2022 by Misha Rudominski and Oleksiy Oliynyk. The project was placed first in the IT Arena 2023 startup competition, which represents the defence tech direction and is held in partnership with the Startup Depot team. Lviv Business Incubator.

HIMERA is a universal secure communication system for civil and emergency applications. It can be used as part of an operational awareness system and it’s resistant to EW due to PPRC technology. HIMERA has the ability to easily set up with Bluetooth via smartphone without learning specialized programs.

CREVV, a Ukrainian design studio, assisted AIN in reimagining itself. Co-founders Nata Ivanova and Anton Ivanov shared insights on their redesign project in a guest column.

In the endless line of Ukrainian brands that require updating are many products we use daily. Nobody can remember it now, but six years ago, Uklon had a video player button logo, and Depositphotos used a standard camera icon as its main symbol. We at CREVV have changed the identities and symbols that represented these modern Ukrainian businesses for a long time.

In late 2023, AIN.UA asked CREVV to update its identity and website. A new logo of AIN is a case of rethinking a well-known symbol by making it up-to-date. It is a challenging and fun task at the same time. We love such challenges.

A message bubble of the old logo got a new sense thanks to rethinking the main function of this medium. Today, it’s not just a website but several different communication channels. But in the end, it all is being compressed into a unit of information, a message. The new symbol of AIN.UA is a segmented message from a messenger.

Two segments are an ‘a.’ If there are many segments, as many as subjects that AIN.UA writes about, you can see three letters in a message: a, i, and n. It is an abstract and simple symbol that inherited the old logo and got new senses. AIN.UA is a daily portion of information for a modern entrepreneur. It is one of many signals the new logo brings up.

Based on modular letters, we created symbols for AIN categories: Business, Tech, Work, and Community. All of them got their letters designed in the same way as the main logo.

Rethinking a modern media format impacted the layout and website design, which is still in progress. News feeds, stories, tabs, window layers—all this inspired us to create adaptive graphical elements that follow the logo form and build an adaptive and recognizable design system.

By font solutions, we wanted to leave behind a neutral current grotesque, so beloved among Ukrainian businesses and IT companies. To create an intelligent mood, we picked Skema Pro News. Why? To prepare AIN.UA readers for a serious vibe, a so-called monocle vibe but more digitally arranged.

Concerning colors, only the central red was slightly updated. In addition, we assembled two bright and dark color sets that one can combine as they wish. So, put it together with a diverse set of forms and several perfectly matched fonts, and you will get a powerful tool for all possible modern manifestations.

The best part of cooperation with AIN was its team’s engagement. All brand identity design decisions are always for people who will work with it. The best thing that can happen to a project is when the brand team is engaged, knows well what they need, and can perceive critics of their product to aim for obviously better results.

We love to interfere in the product part, and this time, it helped us so much develop a new website, which we will discuss in our next article.

Authors: Anton Ivanov and Nata Ivanova, co-founders of the design studio CREVV

Not long ago, the company closed several deals with $50,000 checks with Mantis Analytics, CloudAvocado, and Fintellect and invested $180,000 in S-Lab during the seed stage.

AIN spoke to Andrew Zinchuk, the co-founder, about the most successful startups “to become unicorns,” minimum checks to join a syndicated network, and exclusive details of a new crowdfunding project for investing in defense tech startups.

“If you want our funds, come to us at least six months in advance.”

Nowadays, you actively participate in syndicated deals through your own ZAS.Syndicate community. Are you satisfied with the results, and how does it technically look in reality?

We are one of the first syndicates in Ukraine, right after ICLUB. Our first deal was with Zeely in early 2023.

Following our example, other ventures created their syndicates: Toloka.vc, SID Venture Partners, or United Angels Network. The last one is developed by Ivan Dmytrasevych and Sasha Reminnyi.

You must understand all syndicates have their missions. We, as a venture and a syndicate, are focusing on startups with Ukrainian founders. Our mission is to support them with investments. The conditions are that most team members are in Ukraine and a foreign legal entity, for example, in Delaware (USA) or Estonia. Unfortunately, it is what the current market dictates, and we can’t change it. And the last condition is a startup’s active traction.

As a syndicate, we invest from pre-seed to Series A. We and our investment company usually sign two $100k checks in parallel against specific KPIs during the pre-seed stages.

Our goal is to make one deal every month. How it goes: We give a pitch deck and a brief project description to our investors. After that, we send interested parties a deal memo, detailed information about a startup, and our “homework” about why we believe it would be worth investing in. One or two weeks later, we will do an introductory call with the startup team. Then, we will involve the interested investors who showed in this deal.

Which startup requirements do we have? If you want our funds, come to us at least six months before fundraising. We are the only one in the market with office hours: you can come during those hours, pitch your startup, and get our feedback. We will follow your activity after you get us interested.

The closer the fundraising, the more we will give you mentorship. During these six months, we want to see three things. The first one is the startup’s delivery or how they achieve KPIs, follow the roadmap, and perceive feedback. The second thing is the startup’s fuck-ups and how their team solves critical issues. And the third one is status updates. We have specific monthly report forms.

We see the importance of running this track together and discovering more about the project team. Because you usually invest in the team during a pre-seed round. 

Another critical startup pre-development assessment indicator is our 3-3-3 method: three months of traction in a foreign market (most of the time, it’s America and Europe), at least a $3,000 MRR, and a 30% growth until the end of the month. Although some startups struggle with fulfilling those requirements, for example, a B2B project with complicated sales, low-touch selling projects can do it.

If a startup does 3-3-3, we invest $100,000 in installments through our investment company against set KPIs and make another $100,000 deal within our syndicate. For instance, we invested $50,000 through our foundation within the deal with S-Lab and had to invest the same amount from the syndicate. Nevertheless, we raised $130,000 as a syndicated investment, resulting in $180,000 in total.

We always make pre-seed investments from the investment company first, so it takes the most risks. We split a check in installments according to the KPIs achieved. And in three to four months, we present the project to our syndicate. So, the syndicated deals face much fewer risks thanks to the startup’s live traction. However, the syndicate must consider investing based on an evaluation of the foundation. Then, we invest in seed, later seed to Series A with a check of up to $1,000,000.

So, we closed three syndicated deals last year. The first one was Zeely—$125,000—which raised $1m within the round. The second investment was $500,000 in ComeBack Mobility and a $500,000 allocation against achieving the set KPIs. The third deal was S-Lab, which got $130,000 from the foundation and syndicate. That means we invested almost $800,000 in 2023 only through the syndicate.

Zeely is worth my special attention. They finished the third year of their product existence with a $300,000 MRR and a $4,000,000 ARR. And now, they are closing a pre-series A round with an evaluation of $26 million. We prepared a $500,000 allocation and almost raised the amount.

For our syndicate members, the round was closed in March 2023, and a new round started in December 2023, six months later. The startup evaluation increased from $10m to $26m during this period.

“We will make 12 to 15 deals this year.”

How does your syndicate look from the inside?

We have no paid membership, but all members must invest at least in one deal a year. If they don’t know how to invest, they learn together with us.

In order to join us, you should fill out an online form on our website and wait for my call. I do all the calls with potential new members to understand if our values match.

We also created a Discord channel where syndicate members can chat, discuss ongoing deals, and back our portfolio startups. A highlight of this communication will be our first offline community event to devirtualize and present the next startups in our pipeline.

How many members do you have now, and what is a minimum investment check?

Our community has about 70 people at the moment. $10,000 is the minimum check within the syndicate, but it also could be $5,000 in case of a joint investment with our venture firm. We understand our responsibility to select syndicated deal investors. They must bring relevant expertise and help a startup grow, even if they signed small checks.

When your venture created a venture firm in the past year, you declared a goal to do 30 pre-seed investments in Ukrainian startups. Do you catch this goal?

We follow our plan. Last year, we closed four deals. This year, we will do 12 to 15 more. And the remaining deals will be closed in 2025. Our great goal is 30 new unicorns in Ukraine until 2034.

Which startups would be the fastest to achieve a $1,000,000,000 evaluation?

I think it would be Zeely. They plan a Series A round until the end of 2024 with a sound multiplier after this round. And I know some serious players are watching them.

They meet the T2D3 (triple-triple-double-double-double) requirement: after getting its first $1m ARR, a startup should grow triple in the next two years and double again within three years. Zeely grew up four times after its first $1m ARR.

I may also not name another project yet because it is our next potential deal. If it fulfills signed contracts, it will most likely become a unicorn within the next 3-4 years.

“The investors are very compassionate with the events at the forefront.”

ZAS Consulting is a part of your ecosystem. What does it do?

It’s new. I found its importance when I saw how many foundations look for Ukrainian deal flow but don’t know where to find it. The initial war shock is long behind, and they want to invest. We provide two simple services: paid access to deal flow for subscribers and analytics. We are an experienced venture and know how to do due diligence, reference checks, and background checks of founders.

Including Defense Tech, correct?

Correct. By the way, we launched the first equity crowdfunding platform in Ukraine, BeFunders, exclusively focusing on defense tech projects. Any startup confirmed by Brave1 can be placed on our platform and funded by Ukrainian residents. The checks start from $100. The motto of this project is “Become a Co-Owner of Our Victory.” Last week, we closed the first deal which we will publicly announce in July.

So, we work in stealth mode now. Since it is a B2C story, it requires a decent technical implementation because when Russians see the platform, they will DDoS it.

We solve two issues with the project. The first one is the so-called “donation tiredness.” People become co-owners of the project and can get an upside when the business transforms or gets sold, or an exit will happen.

The second problem is gambling—some soldiers, unfortunately, lose all their combat bonuses or take loans. And we give them a chance to invest in a new military development instead of gambling. They will use the product among the first and make more “Russians good.”

In previous interviews with AIN, you mentioned a curious detail: ZAS Ventures doesn’t invest in startups in the Web3 and hardware domains. Did it change or not? Because many defense tech projects work with hardware.

We don’t work with Web3 if it concerns cryptocurrencies or related services. However, if it concerns a direct blockchain application in a real-economy sector, we are ready to examine such projects more closely.

Our investment company doesn’t like hardware, it’s true. However, our next deal is with a hardware company with a founder you can’t refuse his offer. He has 20 years of experience in the industry and a lot of successful cases. If it were someone else with shorter traction, I would say no.

My last question is about the Ukrainian investment market. In the past year, you said that, unfortunately, only a few investors pay attention to 100% domestic Ukrainian products. Is it better now?

Let’s focus on syndicates and our foundation. In Ukraine, we invest only in local founders as the only pre-seed investor. The others always have a condition of having a diversified foreign presence.

I see the investors are very compassionate about the events at the forefront. For instance, everyone awaited the counter-offensive in the past year. But it didn’t succeed, and enthusiasm decreased.

In any case, there is always a space for optimists. Three weeks ago, I was in the Czech Republic at the Invest in Bravery event that united an insane group of investors—different foundations, angel investors, private equity, etc. They showed great interest in Ukraine, and in September 2024, they will organize a new event in Kyiv at which the best startup will win a prize.

After this event, I returned to my hotel room at ten o’clock at night and wrote to all the founders and managing partners of ventures I know in Czechia. They all responded within three hours, and I met all of them during the next three days of my business trip. So, you can imagine a level of interest in the events happening in Ukraine. They also told me about their support of general and defense tech funds working for Ukraine and trying to exchange deal memos, which inspires people who consider a crisis a time of great opportunities.

• Ilya Boshnyakov will lead the local team and be responsible for the adaptation of new features for the Ukrainian market and the Ukrainian diaspora of users in the world, as well as for partnerships, marketing and communications in Ukraine.
• Previously, Atanas Raykov, a vice president of global marketing and social network development from the office in Sofia, Bulgaria, was responsible for the role. According to Atanas, Ukraine is one of the key countries on the market for Rakuten Viber. So, they were looking for a manager who understands the local market well.

Ilya will be responsible for local launches of new products and solutions, as well as ensuring that Ukraine receives all innovations from Rakuten Viber as soon as possible. We were meticulously looking for the right person, and now that Illya has finally joined us, we plan to significantly expand our activities in Ukraine,

Atanas Raykov, said

What is known about the new director of Viber

Ilya Boshnyakov became the owner and head of AIN.UA in February 2016. In the last three years, he has launched the English-language office AIN.Capital, AIN.Business, and Recruitika, the IT job search marketplace. Before working in the media, Illya was managing recruiting and HR in a group of British technology companies covering the fintech, gamedev, martech, and other industries.

As a reminder, since October 1, 2023, Artem Starosiek, the founder of the Molfar OSINT agency, has become the head and owner of the AIN.UA media group. Back then, Ilya said that the idea of finding a strategic partner appeared at the end of 2021.

AIN visited its facilities and talked with the co-founder, Yuriy Vysoven.

An aerostat looks like a massive balloon connected via a tether. It carries some useful load—a camera or a radio repeater—based on the mission. The latter are more common near to the frontline. The devices help keep a stable connection between an operator and a drone until it hits an enemy target.

Usually, the radio repeaters are fixed to other UAVs. The aerostat has the same function but appears more useful.

“An aerostat can fly for two days. No drone can hold that long, but the aerostats do. And their price is more attractive. Everything that can fly a few hours is expensive,” said Yuriy Vysoven.

One aerostat costs $6,500. According to Yuriy, one can buy 1.5 Mavik drones with thermal cameras for the same money. “They are expendables. Each brigade can lose a couple of them every day,” the manufacturer confirmed. Did the enemy hit aerostats? The project co-founder doesn’t know of any such case. However, he could remember a situation when one aerostat died after a friendly fire—a Ukrainian soldier shot it down. This happened in the Luhansk region. A guy just missed the information that an aerostat was operated and opened fire at “an unknown flying object.”

Another advantage of aerostats is their invisibility. The enemy can see drones while they are approaching, Yuriy Vysoven added. But an aerostat cannot be seen for several kilometers, so you do not need to hide it.

“Sooner or later, Russians will publish a video of shooting down our aerostats. If they do, we will make more. It will be no tragedy,” Yuriy summarized.

The aerostat holds in the air thanks to helium. Its air-inflated “tail” that can change angles and positions helps hold against strong wind and not fall on the ground. Such an aerodynamical form is similar to a kite.

Yuriy shows a mockup. The source material of a small copy made of a transparent thin film differs from the original aerostat made of a special robust film.

The aerostat is fixed with a rope connected to a ground station winch. The winch is operated with an e-motor.

Before delivering the whole stuff—a motor, a winch, a rope, an aerostat, and helium cylinders—to a military unit, it all has been well tested on a proving ground. We were not allowed to come there and see its testing, but we could see a demonstration start of an aerostat within the company’s facilities.

Only two persons are enough to launch this device. First, it gets filled with helium, about 10 m³ or 1.5 cylinders (6 m³ per unit). The level of helium consumption depends on the load. The calculation of the required volume is a complex design process—the officers inform the producer about their needs, the company develops a specification, and the actual work begins.

The wind speed at the moment of the aerostat start should be no more than 15 m/s. Under war conditions, it can run within 2 km from the frontline.

“After the aerostat has been lifted in the air, I would not recommend you to stay under it because if it gets hit, we would better lose it but no lives,” Yuriy said.

The flying device needs a few minutes to get in the sky. After that, the crew must leave. The aerostat slowly loses helium that can go out of any material, even a steel cylinder. That is why soldiers must check and refill it from time to time.

“In any case, our defenders change repeater batteries, so they can check the aerostat and refill it if needed,” added Yuriy.

The inventor recommends launching devices at night which is safer.

An aerostat can rise to 700 meters, but Yuriy emphasizes it is not needed to lift it over 500 meters because a radio repeater can ensure the signal for FPV drones within a 40-km range even at the height of 300 meters. And FPV drones can fly only within the range of 20 km. So, there is no chance to increase the radio range for a drone operator.

However, the signal strength depends on the height of the repeater— the higher a radio repeater is, the better chances are that a signal would overcome electronic warfare. Nobody will guarantee you anything. A drone can leave the range at any time and become closer to the EW than its operator, and the signal will be lost.

“It’s war. We must fight for each meter of signal availability.”

Aerostat manufacturing

The production is decentralized in three locations. The first facility does cloth sewing and balloon assembling. The second point assembles an electronic motor based on a military request (with a radio repeater, cameras, etc.). And the third entity crafts a winch to hold an aerostat in the air. The manufacturer plans to move into one building and unite all production stages.

Yuriy says assembling all parts into one product is much trickier than their production.

Many elements come from Ukraine, but not all. For example, film comes from Italy, and the engines are from foreign manufacturers. Ukraine produces enough helium. But prices and demand constantly increase. Yuriy said that 1.5 helium cylinders cost over 20,000 UAH.

The aerostat development started about 18 months ago, and the products have been used already for six months. It took so long because aerostats had to be refined and tested, and “we had to convince military officers it was not a steampunk from the XIX century,” added Yuriy.

The AEROBAVOVNA team can come close to the front to teach crews how to use aerostats if needed. However, the militants participate in training generally in Kyiv. It is not always easy since the soldiers cannot leave when they wish.

“Everything becomes complicated because the officers can find money but not time to come here or appoint some men. There are travel time and training time. They must spend the whole day on a training ground. If there is an air alarm, the launch of an aerostat can be postponed,” Yuriy Vysoven said.

The company plans to expand its production. Its co-founder acknowledges they cooperate only with a few brigades, but the number of requests constantly increases. For example, Yuriy got about 30 new requests after the YouTube channel Militarnyi made a video about AEROBAVOVNA. Currently, there are 50 open requests from different military units.

How popular are aerostats abroad

Yuriy shared with us some history. The aerostats belong to many national armies. The Americans, for example, use them since the 1970s. During the campaigns in Iran and Afghanistan, they installed 66 strategic aerostats (that can carry several tons of load—radars or cameras).

Poland will also buy now two aerostats from the US. According to a $1.2-billion contract, the Poles will get not only the aerostats but also radars to detect targets and maintenance and training. The recent US military aid package for Taiwan also contained aerostats, Yuriy explained.

The inventor thinks the radars mounted to aerostats can easily replace airborne early warning and control (AEW&C) aircraft, which can fly only for 10 to 15 hours and must land for refueling, while aerostats can stay in the air longer.

“Lifting a radar in the air is a quite practical thing. The Americans have such plains. But let’s be honest, no other nation can allow such a number of AEW&C vehicles because of their impossible value. Anyway, an AEW&C aircraft can be there only for a limited time. To operate 24/7, you must have many crews ready,” Yuriy Vysoven said.

Thus, as a manufacturer, he must admit that Ukraine won’t create an aerostat that could carry radars within the next couple of years. However, engineers are already working on the solution.

“Nobody plans to become a millionaire thanks to the Armed Forces of Ukraine.”

As Yuriy said, AEROBAVOVNA is the only aerostat manufacturer in Ukraine. For sure, there is some margin due to certain costs that cannot be calculated in advance. The project got funding from the Brave1 defense tech cluster.

“Our focus is creating a cool product and proving its effectiveness. If we achieve this, we will get both domestic and international orders and make a lot of money.”

Before the war, aerostats in Ukraine were used as advertising space at festivals. The co-founder of AEROBAVOVNA suggests that after the victory, they will also be used for border control or other security tasks.

According to Yuriy Vysoven, there are already teams in Ukraine that are ready to start new businesses. He names the UK, Turkey, Israel, China, and France as other manufacturing countries. As for Russia, there are aerostat production facilities there, but he does not observe their massive use at the front.

Franchise main features

• Fully electric fleet: 20 Renault Zoe, Honda MNV, Volkswagen ID.3, and BYD Dolphin electric cars.
• The company is considering the possibility of adding several cars with internal combustion engines.
• During the pilot launch, daily rates will be available to users, and hourly and minute rates will be available a little later. However, the insufficient amount of charging infrastructure in Chisinau makes it difficult to introduce the last two.
• Private investors will be able to place their cars for rent immediately in the application.
• The park and development of the service will be fully managed by the Moldovan franchisee — in particular, they are responsible for charging electric cars.

Prospective market

Currently, Moldova has only one car sharing operator with only 10,000 users. The company says that the demand for car sharing comes from both local residents and Ukrainians traveling in transit. Getmancar expects that within the first year of operation, 10,000 users will use the service in Moldova.

To rent a Getmancar car in Moldova, you need to download the application from the App Store, Google Play or Huawei AppGallery, register and choose a nearby car.

About Getmancar

Getmancar is the first Ukrainian car sharing service operating in the Ukrainian cities of Kyiv and Dnipro, as well as in Georgian Batumi and Tbilisi. Users can rent a car by the minute, by the hour, or by the day. Additionally, investors can earn by renting out their cars through the application, or by investing in the purchase of vehicles.

• This is $29 million less than in February 2023 ($547 million) and $321 million less than February 2022 ($839 million). The number is the second lowest since the beginning of 2022.
• At the same time, the volume of IT exports of Ukraine increased by $10 million compared to January 2024 ($508 million), which is currently the lowest indicator.
• Export of IT services accounted for more than 37% of total exports from Ukraine in February 2024 – $1,391 million.

The main partner countries of Ukraine remain the USA, the UK, Malta, Israel, and Cyprus. In general, compared to 2023 and 2024, the volume of exports of IT services to other countries has decreased, but a small increase is visible in the partnership with Poland and Estonia.

In addition, the export of Ukrainian IT services in 2023 amounted to $6.7 billion, which is 8.4% less than in 2022, when it reached a record $7.3 billion.

Ukrainian businesses are currently facing challenging times. However, despite this, manufacturers are trying to find solutions; they are actively venturing into foreign markets. They operate both offline, in countries with large concentrations of compatriots, and online, opting to sell their products on Amazon. This globally renowned e-commerce platform allows them to reach numerous markets with minimal expenses.

Top Markets Ranking

Amazon is a true giant in online retail, operating 21 marketplaces across the globe. According to Statista, the undisputed leaders in terms of net sales were the USA ($395.64 billion), Germany ($37.6 billion), and the United Kingdom ($33.59 billion). For comparison, all other global markets combined accounted for only 19% of Amazon’s revenue – approximately $108 billion.

These countries also lead in other metrics. For example, the Amazon USA marketplace attracts nearly 3 billion visitors each month, while Germany and the United Kingdom see approximately 400 million and 500 million visitors, respectively.

It’s no wonder that Ukrainian manufacturers are striving to access such a broad target audience and achieve high sales levels. Let’s take a closer look at the markets of these countries.

Amazon USA: Features and Advantages

Apart from being recognized as the largest marketplace within Amazon (accounting for almost 69% of the marketplace’s revenue), there are other reasons that encourage our manufacturers to choose the American trading platform:

1. Popularity Among Consumers

According to JungleScout, 53% of Americans prefer online shopping on Amazon. The closest competitor to the marketplace, Walmart, lags behind the leader by 20%. Another resource, eMarketer, reports that 61% of US residents start their product searches on Amazon. Therefore, Ukrainian entrepreneurs prefer Amazon USA, which ensures that their products will be seen by tens of millions of consumers.

2. Tax System Loyalty and Convenience

I’ll start by saying that the US tax system is inherently convenient, especially compared to Europe. Although income from sales in the US is subject to Sales Tax (equivalent to our VAT), its rate is relatively low—averaging 5-7%. Moreover, this tax is not levied upon importing goods into the country; it’s paid only by the end consumer.

In the context of trading on Amazon, taxation in the US market has another advantage. It lies in the fact that large American marketplaces automatically add the tax amount to the price of the product, meaning they collect and pay the Sales Tax themselves. This is appealing to entrepreneurs, as it allows them to save time and money on accounting services.

3. Established Logistics

The USA is the most popular global market, so logistics from Ukraine and China to this country are well established. There are many companies specializing in working with Amazon. They handle various tasks, including preparing and packaging cargo and sending it to the marketplace’s fulfillment centers.

Despite the advantages mentioned above, one downside to the Amazon USA market is significant competition. Statistics show that there are 1.11 million active Amazon sellers in the United States. This is a lot compared to other countries worldwide—the total number of sellers in other markets is around 1.5 million.

However, our manufacturers easily overcome this problem. They do so by ensuring the quality of their products and paying special attention to creating an effective advertising strategy.

Pros and Cons of Trading in Germany and the United Kingdom

Germany and the United Kingdom are two constantly competing Amazon markets in Europe. Although their level of net sales significantly lags behind the American marketplace, trading here is still advantageous for several reasons:

1. Consumer trust: Amazon DE is the e-commerce site with the highest number of visits in Germany. According to statistics, in February 2024, 397 million users visited its pages. Meanwhile, eBay DE, Amazon’s main competitor in this ranking, was visited only 109 million times during the same period.

Regarding the British market, Amazon also holds the lead in terms of visitor numbers. The marketplace records about 500 million visits each month. Considering the population of the United Kingdom—69 million people—this means that all of them visit the trading platform about seven times each month.

2. Relatively low competition: Although the German and British Amazon markets rank second and third in size after the USA, there is quite low competition here. Amazon DE has just under 245 million sellers, and Amazon UK has 281 million. It’s worth reminding that in the USA, their number exceeds 1.1 billion.

3. A large number of Ukrainian immigrants: For manufacturers from any country, their compatriots are the primary target audience. Because of shared customs and mentality, it’s easy to create a product that meets their needs and demands. Official data states that there are currently 1.1 million Ukrainians in Germany and 253,000 in the United Kingdom.

However, working on European marketplaces, including the German and British Amazon, may be difficult. This is primarily due to the peculiarities of taxation and legal business registration. Let’s delve into more detail.

1. Subtleties of income taxation: In Germany and the United Kingdom, like in many other European countries, income from sales is subject to VAT, i.e., the European equivalent of our value-added tax (VAT) and the American Sales Tax. However, there are differences from America. 

Firstly, it lies in the rate. The standard VAT rate in Germany is 19%, and in the United Kingdom, it’s 20%. Secondly, VAT in Europe must be paid upon importing goods and at every stage of the sales chain, both in the B2B segment and in the B2C. Moreover, entrepreneurs must monitor tax payments to the state treasury themselves.

2. Necessity of establishing a legal entity: In 2022, Amazon added Ukraine to the list of countries eligible to trade on European marketplaces. Theoretically, this means that Ukrainians are allowed to work on the platform as individuals. However, in practice, this is impossible because tax authorities in Germany, the United Kingdom, and other European countries do not issue VAT to Ukrainian residents. 

Therefore, registering a legal entity is mandatory for trading on Amazon DE and Amazon UK. However, there is a solution for Ukrainian manufacturers to bypass this somewhat complicated procedure. It lies in the fact that the company does not have to be registered in these countries specifically for trading in Germany or the United Kingdom. You can choose a jurisdiction that is convenient for you. Therefore, it is entirely possible to enter the European market with a registered LLC in Ukraine.

The markets of Germany and the United Kingdom are quite attractive for Ukrainian entrepreneurs. There is minimal competition and a wide target audience, including many of our compatriots. As for taxation, the principle of collecting sales tax is very similar to Ukrainian VAT, so you won’t have to get used to anything new; you can just entrust taxation to professionals.

Getting Started with Expanding into New Markets: Top Recommendations

To successfully conquer foreign markets, it’s important to know where to start and how to proceed. Hopefully, some tips on this process will help you effectively expand your business.

Explore Sales and Revenue Prospects

To immediately understand if your product is relevant for a specific market, analyze the demand for it on the corresponding marketplace. Amazon Best Sellers section, available on each regional platform, can help with this. Find the relevant category of products and see if your product falls into the bestseller category. You can also learn about pricing here.

For the same purpose, it’s easy to use other Amazon tools, such as Movers & Shakers. It contains a list of products whose sales have significantly increased over the last day. You can also try third-party resources like Google Trends, Keepa, and Jungle Scout.

Understand Legal Matters

Is it worth creating a company to enter a specific market? In which country is it better to register a legal entity? How to obtain tax benefits? All these and many other questions can be answered on our blog. Since the beginning of the war, we’ve been filling it with materials that help Ukrainian entrepreneurs understand all legal issues related to doing business in foreign markets.

Find a Logistics Contractor

Contact a trusted company that provides a wide range of services. Such contractors can help you with customs clearance of goods.

Develop an Effective Marketing Strategy

There are three ways to do this. You can promote your products independently if you have the necessary knowledge and skills. You can also outsourceYou can also outsource this part of the work or createcreate a marketing department within the company. You can hire qualified employees or organize training for your own staff. Nowadays, many businesses offer training services for teams managing Amazon projects, where your specialist can gain all the necessary knowledge. 

Register a Seller Central Account

Once all legal, logistical, and marketing issues are resolved, you need to register a seller account on Amazon. Here, we have shared a step-by-step instruction for you to do it. Note that the marketplace thoroughly checks all provided documents and information. Therefore, it’s better to entrust this matter to specialists to avoid registration refusal and blocking. By the way, you can also consult with them regarding further work on the trading platform, including the use of FBA service, intellectual property protection, financial matters, and so on.

Summarizing

In 2024, the most popular markets among Ukrainian manufacturers are the USA, Germany, and the United Kingdom. Working in each of them has its nuances, including tax specifics, legal business arrangements, logistics setup, and more.

To ensure that the exploration of a new market goes as smoothly and quickly as possible, seek the support of professional lawyers. They will assist in resolving all questions regarding business expansion and will accompany you at every stage of your development.

Author: Andrii Matiash, Managing Partner at the 4B Law Company

She separated from RAZOM because she wanted to be effective in miltech besides the existing humanitarian projects. Lyuba has a vision of which problems need to be solved and how. She also worked on document flow digitalization at the Odesa Regional State Administration. In an interview for AIN.Capital, Lyuba Shipovich shared her ideas.

“Ukraine seemed not to have a future.” Moving to the USA in the 2000s

In 2008, you moved to the US. Why did you decide to emigrate? Why to America? You already worked for a Canadian company in the third year of your study at the National University of Kyiv-Mohyla Academy.

I worked for the Ukrainian branch of Tangram, and it helped me get a job in the US because a recommendation letter from Canada was almost the same as an American one.

In 2008, all patriotic movements that boomed after the Orange Revolution in Ukraine, which I passionately attended during my student time, stagnated. A dark era seemed to return when Yanukovych became prime minister, looking towards Russia again. It was my period of youth maximalism when we believed all our successes and ideals after the Orange Revolution’s victory had been betrayed and canceled, and I just wanted to run away from it as far as possible. Ukraine seemed not to have a future.

And I started to look for opportunities abroad. At the time, many Mohyla Academy IT faculty graduates moved to New Zealand, Canada, and the United States, which were my three best options. I filled in applications for IT specialists in these countries and got an email that I won a Green Card on the day I protected my diploma work. It was how I chose the country to emigrate.

What were your career steps in the USA?

I moved to New York City, where my relatives lived. I didn’t communicate with them much before leaving Ukraine. Then, they were unknown to me since I had met them only as a small child. However, it was my starting point.

During the discussion on my perspectives, my relatives said, “Forget all you learned in Ukraine. Everything goes differently here. A friend of mine, a brother of my mother-in-law, worked in a good company. We will ask him to help you. It is so difficult here to find a job!”

I listened to them carefully and decided to research the US labor market myself. I read articles on famous job portals like Dice or Job Monsters. There, I learned that the average response rate is about 7%. I decided to send 100 CVs a day to get seven calls for a job interview. Every morning, I woke up and applied for 100 different IT vacancies.

But it appeared I was wrong about statistics. Seven percent was the average response rate for the whole labor market. In the IT industry, this indicator was much higher. About 50% of my emails got responses. After a week, I had to change my phone number due to an impossible amount of calls and interview invitations.

I left two job offers, negotiated a bit, and got my first IT job after only two weeks in the US.

This small startup, EZ Texting, grew into a large company with offices in three countries and many employees. I grew with the company up to the CTO level. I spent there over seven years.

I persuaded my boss to expand beyond the United States and open an office in Kyiv. We did it in 2012. And the office still works here, although my boss sold the company, and I left it many years ago.

What was your job at EZ Texting?

It is a mass texting platform. It was a popular service in the US during Obama’s campaign, which widely used texting before his first presidency to access the voters. Thanks to that, emergency push messages evolved. There was also communication between school teachers and student parents and business newsletters.

The platform provided mass sending and receiving text messages. It was a two-way communication, for example, for TV shows that ask you to text a keyword.

After you moved to the US, your relatives said you should forget everything you learned in Ukraine. What was the difference between Ukraine and the USA?

There is a stereotype among immigrants that you should start from scratch, from the bottom. You must forget the education and experience you had in Ukraine. In reality, it is a myth. Maybe it was so when Ukrainians migrated to the USA in the 19th century and worked in mines in Pennsylvania.

But it is long not so, I believe. Ukraine gives people a good education, especially in trans-border professions, such as computer sciences, finances, pedagogics, and medicine—all multinational subjects. And Ukrainians have always been well integrated into English-speaking society. They read scientific papers. They participate in international congresses. So it’s a cliche that you must work hard at the worst job after moving to a new country. It’s long not true.

“I didn’t know how to translate хабар.” Opening an office in Kyiv

Were you not afraid to open the office in 2012? Yanukovych was the president of Ukraine, and there were obvious economic and political risks: a non-transparent government, corruption, monopolies, etc.

I have lived pretty long in the United States at that time. If you live far away, you can forget what things are in reality and start wearing pink glasses. You only return during a vacation for a few days, and it all looks pretty. The restaurants are working. Your friends are smiling. All this influenced my point of view.

So, we needed an office to represent us in Ukraine. I contacted several real estate companies to find a proper one and suddenly got lost in translation because I didn’t know how to translate хабар [bribe in English—edit.].” I didn’t know how to explain to my boss that if we like an office, we must give a bribe to its owners to get this office. Later, I managed to find a proper translation. But back in 2012, I was shocked and forgot such things could exist.

One day, I even thought the idea to open the office here wouldn’t work. Those days, real estate agents looked like big guys with barsetkas [specific handbags—edit.] who showed us real estate in Kyiv.

But fortunately, it went well thanks to our great partner, Alex Lutskiy, Founder & CEO at Innovecs, whom we met through our friends. In a hotel lobby, Alex presented his drawing portfolio. He told us about Innovecs, a company that has yet to be established. Now, it’s large and famous in Ukraine. But then, it was only drawings. The founder of our company, Shane Neman, asked me, “Do you believe they can do it? That these drawings wouldn’t be it?” I answered, “Let’s try first, and we’ll see.”

Four weeks later, we visited their new construction object near the Taras Shevchenko underground station. It had bold walls and unfinished renovation. Shane asked me again then, “Are you sure there will be something here? An office?” We believed in them and became their first customer. They built an isolated office for us from scratch and helped hire people. That’s when the outstaffing concept arose. It’s when a hired person carries out all the job duties for a company (client) being officially employed by another company (outsourcing agency).

I remember other customers coming to our office and telling us about the results of that kind of partnership, where we played a role model.

What was your boss’s reaction to the bribe situation?

None. I didn’t inform him. I just told him the owners didn’t want to lend the facility to us. I was ashamed and decided not to share this and avoid Shane’s disappointment in Ukraine.

Returning home and the beginning of the war

How did your career continue in Ukraine?

In Ukraine, it didn’t. We created an office; I returned to the United States and built my career there. Later, we sold EZ Texting to Callfire, a larger business that kept the Ukrainian office.

At the beginning of the Revolution of Dignity, I was in the United States. My friends and I registered a non-profit organization, RAZOM, and started helping Ukraine with funding, providing agency, and protecting Ukrainian interests in the US.

And suddenly, a war began in Ukraine. At the same time, I continued working as CTO at EZ Texting. I had two full-time jobs—I helped my native country and led the technological development of my company. With this adrenaline, I could work so until the summer of 2015.

Then, the company was sold, and I received my part, which was enough to live a year without a job. So, I quit the company and went to Odesa to work in Mikheil Saakashvili’s team on things I knew well—digitalization.

It became the first region of Ukraine to provide digital document management and digital services at a state administration. There was no Diia at the time. Dmytro Dubilet and I worked on iGov, a government services portal, and launched the first digital services in the Odesa region. We also implemented more projects like Affordable Meds, where patients could check budget reports online.

I have been to Odesa until 2017. Then, I came back to America since I had no more savings. I changed two jobs because I believed I could work for somebody as an employee. But it appeared I didn’t. That’s why I founded my own US-based fintech company, Data Ocean, in 2020 with an office in Ukraine that became profitable within a year, which was very fast and successful. I couldn’t believe it was so easy to achieve.

We had great development plans. However, on February 24, 2022, all our key specialists in Ukraine went to the military commissariats. Almost all of them continue to serve and destroy the invaders. So, we paused the business in 2022. It was absolutely natural.

Two months before the full-scale Russian invasion, we planned our actions in the case of a big war. And on February 24, there was no panic. Everybody followed instructions: where to deliver papers, equipment, etc.

I am sure, as a business, we were well prepared for this scenario. I remember my friends from other businesses laughing at me on Facebook when I asked them how they would prepare for the invasion.

Did you not plan to replace your employees who went to serve?

Our business is pretty special—it’s the registers for bank compliance monitoring [checking if actions of a company and its employees are legit—edit.]. It is about sensitive data. On February 24, we shut down all servers at once because personal data was one of the enemy’s primary targets. And now, while having a physical war on battlefields, we also have a cyber war that caused data protection costs to increase. So, our business became unprofitable in front of multiple cyberattacks.

Thus, the registers operate in the private mode. We grant access to the Ukrainian special services and the Anti-Corruption Action Center. There are no public packages anymore.

They could return in the future, but after Russia has been destroyed. Today, the business can’t be my No.1 priority. It is the support of the Defense and Security Forces of Ukraine for me and many Ukrainians.

What benefits do the special services get by accessing your databases?

We provide access to our compliance registers, mainly regarding politically exposed persons, their connections, associated legal entities, etc. It is pretty helpful for different investigations. DataOcean is not just a name; it possesses vast datasets.

Dignitas Fund

Let’s discuss your charity activities and Dignitas Fund. When, how, and why did you create this foundation?

At the end of 2013, several Ukrainians in New York and I created Razom, a fund that helped Ukrainian citizens during Euromaidan and supported veterans later. In 2022, Razom could raise over $65 million, $48 million of which became military aid, mainly tactical medicine equipment and UAVs. In 2022, I came to Ukraine from the US because I believed I had to be here to provide qualitative aid.

At the end of the year, we discussed our priorities for 2023. The board members in the US and I had some differences in the vision of the future. They stayed in the position to cut military support and focus on humanitarian aid. I didn’t understand it. How can we support humanitarian actions when people die every day, and the war goes on?

We must support the military to avoid the endless needs of suffering civilians. The enemy must be stopped so that we don’t have to buy more prostheses and care for more orphans.

I didn’t want to protest and persuade them of the importance of my point of view. Therefore, our military and veteran project teams decided not to argue. We separated into a new fund where there would be no doubt about which projects to support. Because it is a foundation that provides special technology aid to the Security and Defense Forces, that’s how Dignitas arose.

It wasn’t a new beginning since we had running projects with active teams. For example, we got the Victory Drones project that was created in 2022 and the Flight to Recovery project aiming at rehabilitation of heavy-wounded soldiers. We continued delivering drones to the army. By doing so, we didn’t interrupt working and focused on tech support and training of the Armed Forces of Ukraine, National Guard, Border Service, and other military units.

Are you still participating in RAZOM activities?

No, I quit. I am its co-founder because this title can’t just disappear. But I left the board and totally focused on Dignitas.

Which Dignitas’s projects can you name based on the most effort made?

• Victory Drones is probably the largest and the most famous project in Ukraine. Mariia Berlinska leads it within our fund. First and foremost, Victory Drones provides training to our soldiers on how to apply technologies in the war. Over 50,000 combatants have finished practical training on training grounds within this project.
• The Development of the Ukrainian Miltech Community is an association between military tech robotic systems and producers of AI technologies.
• Furious Birds provides military units with combat drones manufactured in Ukraine.

All our projects are connected. At Victory Drones, we develop a manufacturer community, and at Furious Birds, we purchase UAVs from Ukrainian manufacturers to support their growth.

• 1000 Drones for Ukraine supplies surveillance drones to military scouts.

We split combat and surveillance drone initiatives since we may not raise funds for the last ones in the USA. So, Furious Birds doesn’t work in America, but 1000 Drones does. We have one legal entity in the US and one in Ukraine to balance and decide what and where we can do.

• The Flight to Recovery project trains boys and girls to assemble, repair, and pilot UAVs during rehabilitation. We establish training rooms at rehabilitation centers where trainers can do their lessons. Watching a veteran who lost three of his four extremities operate a drone is exciting. It is a masterpiece and extra motivation for veterans in rehabilitation. It also motivates our trainers and military students when one can say, “Look, your comrades can fly even without hands. What is your reason to say no?” It is one of my favorite projects.

• Protecting the Beauty of Ukraine is a joint project with EVA. Its goal is to teach 100 female soldiers aerial reconnaissance and provide them with equipment. Now, the half of the project is behind.
• The Mobile Shower Laundry Unit is a project that looks different from the others. However, its name corresponds with the name of our fund. Dignitas means dignity in Latin. And the hygiene of soldiers is about human dignity and accessibility under any condition.

Currently, we put our Veteranius project on hold. It aims to teach soldiers civil IT. It is about helping Ukrainian veterans reintegrate into civil life. At the moment, there is no demand. But we are ready to resume it any time. Some of the mentors from this project educate soldiers on training grounds within the Victory Drones project. Otherwise, if the war slows down or there is a demobilization wave, we will start to adapt veterans to the civil IT industry because all our projects are dedicated to technology. We believe we can save lives, help equalize the battlefront situation if the aid volume is sufficient, and even win at some parts of the front. That’s why we invest in the development of miltech the most.

You have another initiative—UAV Engineer—teaching to craft and operate UAVs.

The UAV Engineer is a course on the Prometheus platform powered by Victory Drones. We have three online courses:

• Technology Application during the war is a restricted course for combatants access to which is granted upon requests from their commanders.
• UAV Engineer is a basic course for all.
• People’s FPV is about handmade drones.

The two last courses have free access.

Why are there public and restricted courses?

The Technology Application during the War course has been developed for the military only. It has military officers as lecturers and special topics correspondingly. We verify its participants to restrict combatant access only to avoid leaks to the enemy. Part of the training materials have already been leaked and translated into Russian. However, we constantly update the materials and keep them closed so the enemy doesn’t feel we help them. It contains a lot of sensitive data regarding nuances of technology applications in Ukraine.

“A million drones is a real and too small number.”

Now, we have more and more drone operator schools. What mistakes do they make that can be avoided?

People must understand that civil and combat drone operations are two different skills. Civilian pilots don’t turn into good front operators automatically. So, civilian schools must have military teachers who serve and know how to work at the zero line. Or you can constantly be in touch with them because technologies change quickly. It means the things that worked two months ago don’t work today.

Our trainers do field training directly on-site, close to the front. The trainers also must not lose their practical skills.

The war is such a huge impulse for technological development that civilians must spend much more time catching up.

What is your opinion on the development of miltech in Ukraine?

It evolves amazingly fast. It is only a pity that the war caused this. Another pity is it happened with delay. If we had such technology evolution at the time of the full-scale invasion, we probably could strike Russia back beyond our borders relatively fast. But unfortunately, we didn’t have this technology two years ago.

It would be unfair to say that the state doesn’t pay attention to miltech development. There is a state-backed Brave1 agency, a Ministry of Defense accelerator, the Army of Drones project, mass drone purchases by state bodies, etc. But it all is still not enough for such an intense war.

We must buy more. The government should invest in technology development before purchasing ready solutions. Because in order to develop a business that can sell its products to the state, you must invest before. The business should be sure its products will be purchased.

The government officials say the government will buy over a million small drones this year. But first, someone must manufacture them. The manufacturers without signed contracts are not ready to scale up their production without guaranteed sales in the future.

One more time, only short-term contracts are signed today. The state should make at least middle-term or three-year contracts so that the businesses can plan their production expansion.

Unfortunately, R&D and initial production expansion stages are possible only thanks to private investments and charitable organizations. They are ready to buy even those drones that haven’t received a state certificate yet. Thanks to this, the manufacturers can survive and slowly develop. However, it would be much faster if the state concluded contracts with guarantees and invested in production development.

And, of course, there is a lack of standard ammunition for drones. Civilian companies manufacture drones and no ammunition. They provide vehicles and products that can transport something.

Nowadays, over 90% of soldiers craft explosive devices, which is connected with some difficulties by drone projecting. Because the manufacturer doesn’t know the weight, form, and size of a self-made explosive device and therefore cannot make an optimal vehicle for it, another problem is those explosives are not safe. They can either not explode or explode during a drone start. We have many operators wounded due to a lack of standard ammo. And this part can be resolved only at the scale of the government.

We visit the frontline quite often, bring aid to our soldiers, and speak to our military instructors. I even did a few tours for officials from the Ministry of Defense. I asked them to look at how the ammunition is produced on a bold clay floor in a simple house.

And what did they answer?

It was not “old bulls.” They are young people who came into their offices to make changes, and they were shocked and tried to figure out how and why such things happen. And I know there are some improvements in the field of standard ammunition. The three ministers announced their development during the recent events we visited together. Still, there is no standard munition on sites.

Do you believe in the promised one million drones?

It is a real and too small number. According to our calculations, we need about 3.5 million FPV drones for this year.

What will be the costs?

Speaking of FPV drones, they cost about $500 apiece. It is not big money for the state. The government could invest in this to let manufacturers expand their production and sign long-term purchase contracts.

What do Ukrainian manufacturers do to be more independent from Western help?

In fact, we don’t depend on our Western partners in FPV drone production. The parts come mainly from China.

At the same time, Ukraine tends to localize production and evolves pretty quickly. Sure, we won’t be able to use only local components shortly. For example, there is no option to set up microchip production in Ukraine within a few months. It is years of mass investments. However, some components can be replaced soon: plastic and carbon parts or flight controllers are already made in Ukraine. The same works for engines, fans, and electronics.

Some big Western companies have even expressed their interest in our production facilities. They want either to create production here or sell such products to us. About a month ago, American media published hot news about the White Stork drones. The project seems to be associated with the ex-CEO of Google, Eric Schmidt. These FPVs are supposed to be used in Ukraine. So, the West understood how important unmanned aviation technology is for current wars and that tanks would soon be put on sale as non-liquid assets because a tank costs millions of dollars, and a drone costs only $500.

NATO members follow the experience of Ukraine, and I think they will refill their armories mainly with UAV technology in the coming years. Many European and American business representatives visit Ukraine to learn about our experience.

How did the attitude of average Americans to the war in Ukraine change?

I visited the United States in December 2023, and Ukraine seemed to almost disappear from their media. They discussed Venezuela, border problems, future elections, etc. And now, Ukraine has become a means in the political struggle between Republicans and Democrats. They debated whether to help Ukraine or protect the border with Mexico.

In general, Americans support us. But they forgot about us since there is no Ukraine in their news. Americans can even ask you, “Does the war still go on?” If people don’t see the war going 10,000 km away on their TV screens, it doesn’t exist anymore for them. So, we must do everything to keep their media interested.

Three CNN teams worked in Ukraine for the whole year 2022 and part of 2023. Recently, I chatted with the editor of the Ukrainian CNN office and asked for support. She answered that all their teams left Ukraine. So, CNN will not say anything about Ukraine.

Yes, not only tragedies can attract attention to the newspapers. However, we must remember them about the war. Maybe we should also learn from the enemy. Look at their propaganda-spreading channel Sputnik. Russia continues to invest in it and puts some entertainment content there to keep its audience interested.

What do you think about Russia’s technological potential?

It is huge. If we were better in unmanned aviation a year ago, now they have caught up with us and sometimes are even better than us.

It is vital not to underestimate the enemy. Russians have very powerful engineering high schools, such as the Novosibirsk universities. In addition, the Russian Federation is an autocracy with vast financial resources and can scale up any technology relatively quickly. We all know of their Lancet and Orlan drones. Can we do the same? We did it a long time ago. But we cannot scale up production.

Another crucial thing is who will be faster to develop a cheap optical target acquisition technology. Today, drones are still man-operated and must also avoid enemy electronic warfare.

An optical target acquisition system can help solve this problem. This means that if an operator loses connection with a drone but has already captured a target, the drone will fly and hit it automatically. And it will be a game changer at the frontline. Both Ukrainian and Russian experts work on it. The ones who do it faster will get a great advantage on the battlefield.

The second point is swarm technology. Today, we have one operator for each drone. If an operator can operate 50 to 100 drones at once, it will be another game changer. Several Ukrainian manufacturers already have some prototypes that are to be proven in the field.

“The Ukrainian Paper Army”

Let’s remember your experience at the Odesa Regional State Administration. You worked on introducing digital document management. I know the issues of bureaucracy in the army are pretty sharp. Many officers are tired of complaining and making jokes about the situation. They seem to be desperate. What do you think about changing this bureaucratic system now?

When I offered to switch to digital document management, I heard an answer with thousands of reasons why it is impossible. After working in the private sector in America, I never worked with the government.

I listened to all these “reasons” and grew tired of this. So I went to the Chief of the Administration, Mikheil Saakashvili, and released a resolution that there will be digital document management starting next month. Period. The officials with 20 years of experience ran and whined, but they had no choice. They had to follow orders. After you switch to paperless, it is an irreversible process. You cannot roll it back.

The current CDTO of the Ministry of Defense, Kateryna Chernohorenko, moves in the right direction. They already implemented digital documents for the Armed Forces and forbid duplicating them on paper. I think the next step should be a total ban on paper documents except for classified data.

The Ukrainian army changed a lot in the last two years. Maybe not as fast as we wish, but it is really two different armies—the one from 2022 and the one we have now. For this, we can thank many businessmen and IT specialists who joined the military.

The modern army has a strong human potential. The Armed Forces would never afford to hire such well-paid professionals. But now, they have them thanks to mobilization and their free will. And if you have many professional people somewhere, changes are inevitable. And the changes are happening already.

The Armed Forces of Ukraine use a lot of digital services. For instance, Kropyva existed from 2014 to 2015. It was a base for the Delta, Vezha, and Ochi systems.

All these services became possible only thanks to a bright flow of qualified specialists in the AFU, routine digitalization, business process management, SAP introduction, etc. All the innovations are a big progress for the MoD. But it would be much better if we did it during a time of peace and prepared for the war.

• 1991 Ventures is a London-based seed venture fund founded by Ukrainian brothers, Denis and Viktor Gurskyi, who are better known for running incubation and accelerator programs inside Ukraine. The Gurskyi brothers previously backed more than 200 startups between 2016 and 2024, via their incubator Social Boost and their 1991 Accelerator.

• In 2019, the Gurskyis created 1991 Mariupol. It is a technology startup center, launched with Ukrainian President Volodymyr Zelenskyi present — served as an outpost of East Ukrainian innovation, giving the frontline port city hope. 

About the new 1991 Fund

1991 Ventures plans to invest in over 40 companies across the fund’s lifecycle and will build on the incubation and accelerator programs the Gurskyis have been running from Kyiv and now London, which have seen a third secure funding. It is also backed by UK’s limited partners Venrex and Samos Investments, early institutional investors in Seedcamp and Entrepreneur First. 

It’s very hard for Ukrainian founders to tap into London. So we would like to provide them with pre-seed or seed funding so that they can… access larger rounds in the future and understand how the U.K. can be a springboard to global funding,

Denis Gursky, founding partner of 1991 Ventures, commented.

• 43 global companies invested in Ukraine already during the full-scale invasion, including Bayer ($65 million), Carlsberg ($40 million), and CEMARK, which is part of the CRH group of companies ($30 million).
• Another 12 companies announced investments, including Baykar, the developer of Bayraktar drones, which plans to invest $100 million in building a factory, service center and headquarters in Kyiv. At the beginning of 2024, Baykar started the construction of a plant near Kyiv, where about 500 people will work. Construction takes about 12 months to complete.

• Also in 2023, CRH, the leading producer of construction materials in the world, signed a mandate letter with the EBRD regarding the joint acquisition of the assets of the Italian company Buzzi in Ukraine.
• The most attractive sectors for global investors are IT, defense, and agribusiness.

Currently, the Ministry of Economy has identified five key sectors with investment opportunities totaling $292 billion: energy, transport and logistics, agriculture, “green” metallurgy, and critical materials. These industries make a significant contribution to the economy of Ukraine, have global growth potential, and also need replacement of destroyed capacities.

So, the team has been developing a long-range surveillance UAV (up to 80 km from the operation station) called Buntar 1, special mission-planning automation software, and an AI-driven navigation system working without GPS, for example, under the influence of enemy rear electronic warfare means.

They plan to raise funds for three other drones and get them tested and certified by the state certification body to prove their effectiveness on the battlefield in the coming summer.

AIN.Capital talked with the Buntar team about its project perspectives, private and state investments, and how to keep Ukrainian innovations hidden from the enemy.

Tell us about the project’s origin—from the very idea to the team expansion and project implementation.

Ivan: I joined the Armed Forces of Ukraine in April 2022 as an infantry private and got a concussion in the Popasna area. After the rehabilitation period, I have been dispatched to a unit I am not allowed to name.

Through our familiar friends, I met Kateryna, who worked at Brave1 then and helped them test several drones. We analyzed defense tech in Ukraine and decided to do a workshop dedicated to a well-known problem to be solved in the form of a high-quality product of an international startup.

We wanted to speed up the creation of new high-tech products and not just combine some Chinese plastics with some Chinese engines. I spoke to my military superiors and explained what we could do, and they supported my idea. During a team call, I officially announced: “Now we are going to make an aircraft.” So, it is how it started in August 2023.

Bohdan: I have known Ivan since we were in a startup accelerator in 2017—Roman Kravchenko’s IoT Hub. Last year, we met again. I also met Katya there. So, we three started working on this project. At Buntar, I am responsible for the quality of the product according to military officers’ expectations and needs.

Kateryna: Before the full-scale invasion, I volunteered and worked a lot in strategy and sales departments. I wanted to be useful for my country and not to feel ashamed in the future. At Brave1, I shared many prototypes to be tested at the frontline with Ivan. One day, during a call, we decided that we could implement a really cool project. Buntar was born on that day.

Today, I am responsible for operations, international cooperation, and GR, and I do my best to attract as many soldiers as possible using Buntar and our software.

The Buntar project is already six months old. Can you tell us about its development through time? What results have you achieved so far?

Ivan: We closed an investment round and raised over a million dollars from investors who wish to stay anonymous. Now, we are ready to slightly extend this round to close it with an overcommitment and expand.

We have 25 super professionals and our own production. We have three R&D teams: The first one develops the aircraft, the second one creates software for mission planning and execution, and the third one deals with navigation without GPS, using multiple channels simultaneously. A fun thing to mention is that all three product team leads are called Taras.

Our invention—the Buntar1 UAV—uses a multi-rotary system to take off. After that, the drone switches to the aircraft flight mode. This helps significantly decrease UAV losses due to operator mistakes. The personnel learning process is quite quick and takes only five days.

Instead of a drone mission planner, we use the Buntar Copilot AI-driven software. It automates many flight mission preparation routines and advises on a mission.

The software can be integrated with other types of aircraft. It is already in use in many units of the Armed Forces of Ukraine for mission planning.

We already ordered the parts required for two new UAVs. Tests will run in April-May. After the test phase is completed, our goal is to get approval from the army and sign our first supply contract to expand the production according to incoming orders. We are already in negotiations with potential customers: In Ukraine, not exclusively the Ministry of Defense can purchase military vehicles but also the Ministry of Digital Transformation via State Special Communication Enterprise [Derzhspetszviazok], and some units with separate budgets allocated for this kind of purchase.

We were invited to international exhibitions. We won’t go yet because first, we must show the ultimate result in combat conditions this summer and build the production.

Kateryna: After our field tests, we want to obtain certificates from the MoD of Ukraine. Officially, it should take about 20 working days, but, in fact, it can last up to two months. These certificates will help us get state orders from military foundations like Come Back Alive or Serhiy Prytula Charity Foundation or directly from military units.

This summer, after testing our aircraft abroad, we plan to go for NATO certification. It’s all taking long and full of bureaucracy. Certification rules existed for many years, and nobody was ready for a full-scale war. Ukraine, like a training ground for different military inventions, helps NATO change. We could solve safety issues at the NATO level since intelligence is one of the key defense aspects that so many nations lack.

Bohdan: We deeply study alternative products to stay up-to-date not only for now and here but also to join the collective safety efforts in the future. There are a lot of aircraft manufacturers. However, most of them just assemble their products from more or less standard parts. This number will only increase because of the growing demand for drones. But there is a question: How should one perform missions most effectively and qualitatively?

How many specialists does your team need to run serial production?

Bohdan: Now, we are hiring to cover five open positions. There is a saying: You are either fighting at the front or helping those at the front. So, it is the best time for civilians who are not fighting yet to support the defense forces with their intelligence and skills.

We need software developers, engineers, QAs, designers, constructors, avionics specialists, etc. There seem to be a lot of opportunities for such people, but not many projects combine military, engineering, and business expertise.

To create a game changer in this war, we need qualified specialists who will professionally build, plan, and develop. People are mostly wanted in production because it is still in the form of manufacturing. The software part is much easier, thanks to its similarity to ordinary IT products: Concept, Testing, and Development. But our customers are not civilians but military guys.

Ivan, in your previous interview, you said that our military specialists knew on the second day of the full-scale Russian invasion how the Iranian drones were working and how to locate them. How is it possible to keep Ukrainian innovations in secret?

Bohdan: We have both physical and data security officers on our team. We work in secret locations with different access levels. At the same time, we use some tricks to erase traces in case our creation falls somewhere in the enemy territory.

Ivan: It’s normal for technology to be discovered sooner or later. After the Russians shut down our first board, they will investigate all its parts for sure. We just postpone this moment for now. However, it won’t be an issue. Feedback speed is vital. How fast can we implement new features into software or hardware; how will we react to the fact this info is already known to our enemy? The reaction speed and our adaptivity are crucial safety means.

The Ukrainian state motivates citizens to assemble drones from Chinese parts at home. Such “actions” sometimes get criticized. How do you like this initiative?

Ivan: I would be careful here. We don’t criticize because doing something is much better than doing nothing. I think there are more efficient drone production ways. Producing components, controlling quality, testing, and adjusting—all these procedures are complicated. And I think the real high-quality can get to the battlefield only from an organized manufacturing facility.

Kateryna: We should think about international partnerships, appropriate management teams, and, first of all, the actual needs of the front fighters. We should consider what we can change in FPV drones to leave the RF beyond. But I can agree with Ivan—we don’t criticize or comment; we just do our job.

There were a few scandals with donations for military needs in the past year, especially the one with mortars. After that, Ukrainians started to check donation campaigns more carefully. Do you think the fundraising campaigns for military developments were also affected? How exactly will you provide reports, and how detailed will they be?

Kateryna: We do public reports. We are absolutely transparent. There is always a request from a military unit. Then we check all the papers. We don’t feel any problems with donations.

Ivan: We can report on our purchases. Part of it is paid with public funds; another part is covered with private funds. For safety reasons, we cannot provide detailed information about private money.

The main thing here is to hand over the package to the soldiers. For example, if we can’t collect enough donations to build a complete UAV, we inform the donors that we will cover the rest with money from fundraising. Then, we assemble the complete drone system and hand it over to a specific surveillance unit, which will later give feedback on our product, which is really doing its combat missions.

There are also special state bodies that audit the MoD suppliers. We can always confirm what we have purchased and inform that a certain military unit got the product and conducted specific war-related tasks.

Bohdan: We promote investments in Ukrainian arms developers. So, people donate to a developer who creates jobs and the basics of the future weapon industry.

Kateryna: Investing in Ukrainian defense tech decreases the risk of having situations similar to those with stolen mortar donations or DJI Mavic drones. The result of this investment can be seen on the battlefield.

Ivan: We change the donation philosophy. For example, people donate to purchase EOS UAV systems. They are also needed. However, from a long-term perspective, we must build our defense industry to find better and more affordable solutions that will also last. Doing so will strengthen our defense so that no bastard can come to us from the east alive.

What should be the structure of the military-industrial complex, which, in your opinion, Ukraine lacks now? Which roles take businesses, startups, and the government? Which specialists are demanded?

Kateryna: We and the government should build partnerships. For a startup, you must have a team—managers, hardware & software departments, and engineers who will assemble. Then, you ask the military about their needs, deliver it to the frontline, and receive quick feedback from the battlefield.

Your professionals must be allowed to go abroad to show their developments at exhibitions. So, you must clearly distribute roles in your team and write a roadmap, which is often, unfortunately, missing even at the state level.

We also need to have defense builder accelerators—startup support & development programs that provide funds, mentorship, training, and access to resources. Currently, our team is going through the acceleration at Scale Wolf [a venture and a tech acceleration program focused on dual-use technologies that can be applied in both the defense industry and business. The foundation cooperates with Lithuania’s Ministry of Economics and Innovation—edit.]

Many teams need more current assets for spare parts, operational activities, and R&D. With Ivan, we got a great talent who managed to raise an incredible amount of funds for our startup within just six months. In any case, so many people still must be taught fundraising skills.

How can Buntar Aerospace become profitable thanks to national and foreign customers?

Ivan: We can be profitable with our very first contract. We explain to our international partners and investors that supporting defense tech in Ukraine is not only about helping Ukrainians but also an opportunity for NATO members to prepare themselves for potential conflicts to come. If they cooperate with Ukrainian defense tech companies, it will be much faster and more effective.

Profitability is not our main goal. Our primary task is to develop high-quality products, increase the evaluation, and attract more investments in R&D. We have prepared another five projects to present before the next round of investment.

Multiple times, European or Ukrainian investors said they didn’t understand why we had such a high evaluation and asked for a discount since “we are a Ukrainian startup, not international.” However, the US bidders are totally OK with that number. To obtain a technology advantage on the battlefield, we require funds for R&D because you cannot build a tech company for $100K.

What problems with state investments in military projects do you find the most urgent?

Ivan: That there is no investment.

Kateryna: Another problem is not understanding what a startup is, how good it is, and how much funds it requires. There are only a few programs supporting the defense tech. Climate change or dual-use goods are far more popular, for instance.

Bohdan: You can get $25,000 from Brave1. It’s a great initiative, for sure. But if we speak about defense, it’s always costly. The idea that an engineering military solution can be cheap is a utopia because any military application means a harsh environment requiring specific components, approaches, and tests connected with increasing the final price five to ten times compared to an ordinary device for civil use.

How do you attract investments? Who is your favored donor category?

Kateryna: Currently, we collect donations in a “banka” (a special donation-collecting product by monobank—edit.) within our personal networks. We organized a fundraising campaign and asked the Dopovidai team to help start our first fundraising and establish communication with Ukraine-based donors.

Multiple military officers, foreign defense tech networkers, and Ukrainian IT specialists are among the first to send us their generous donations. Soon, we will get $25,000 from Brave1. Unfortunately, that will be all from the state at the moment.

Bohdan: The banka is not a way to fund the project. It is a donation campaign for a UAV set for our army [7.5 million UAH for three drones and a land operation station—edit.] We want to increase the number of active-fighting UAVs this summer. However, the major part of investments is private ones.

How can Buntar Aerospace be changed after the full-scale war? 

Ivan: Many things in the project can be turned into dual-use products. But now we are making a quality product for intelligence. Not only the defense forces but also the special forces are engaged in intelligence. And there will definitely be more of these forces after the war.

Some people think that the need for military technology will decrease after our victory. But it is exactly the opposite. Even after the win and returning to the 1991 border, we must defend these borders as we do now.

Investors, politicians, and defense ministry officials from different countries are working with us. They once thought they would simply share their technologies with us and everything would go well, but these technologies did not work. For example, they were sure that GPS would work, but there was no GPS in the combat zone, while our AI-based navigation module can work without satellite navigation, which means it is resistant to electronic warfare.

Ukraine is now creating military developments that will be in service for the next 30-50 years. We will make the best products. Will we take on the following tasks? We’ll see, but I’m sure we will. 

In Ukraine, there are private capital owners who dream of bringing our victory closer but do not know how. On the other hand, there are people who know how to make products: engineers, team leads, and managers. We need to unite them, teach them how to invest correctly, and explain the peculiarities of management, finance, and R&D production. 

We want to share our experience with others and build an ecosystem of companies engaged in development in their niches around Buntar Aerospace. We are working on a project to bring these two parties together. We need Ukrainian capitalists to consider investing in Ukrainian defense-tech startups, even with checks of $5,000-$10,000. Because, first of all, it can speed up the victory and bring us back to a better life. And secondly, in business terms, you can make money on it because such products will be sold in the huge market of NATO member states.

Why and to whom Embracer Group sells Saber Interactive 

Embracer Group wrote that the agreement for the sale of Saber Interactive was concluded today, March 14. Thanks to it, the Swedish holding will stop its activities in russia, as was decided the day before at the board of directors. Beacon Interactive, controlled by Saber Interactive co-founder Matthew Karch, is the buyer. In a matter, Saber Interactive acquired itself.

The deal should improve cash flow, reduce capital investment, net debt, and future liabilities for Embracer. The assets sold include 38 ongoing game development projects valued at approximately SEK 2.3 billion, which is approximately $224,548,000, as well as some proprietary engine technology and gamedev tools.

Studios Nimble Giant, DIGIC, Mad Head Games, New World Interactive, 3D Realms, Slipgate, and Ukrainian Fractured Byte (Brothers: a tale of two sons) will also be transferred to companies with russian roots.

Embracer have left 14 games in the portfolio. This also concerns the Ukrainian 4A Games (Metro), which was acquired by Saber in 2020. However, the buyer, Beacon Interactive has been given an option to buy it back, as well as Hungary’s Zen Studios for a fixed price over a “certain period of time,” according to a published statement. But the parties agreed not to disclose the amount and time period for the purchase.

Ukrainian game developers will still become part of the company with russian roots

Fractured Byte will definitely be taken over by Beacon Interactive. The same fate will most likely await 4A Games: Bloomberg journalist Jason Schreier wrote on X that Embracer’s announcement of the deal is “a little misleading.” After all, Saber is actually bringing along 4A Games and Zen Studios through options, which (combined with liabilities) amounts to a purchase price of around $500 million. He also added to the thread a screenshot of the letter from director Matthew Karch to employees, which confirms the decision to acquire these companies.

Saber Interactive is an American company headquartered in Florida, USA. It was founded by Andrei Yones, Matthew Karch and Anton Krupkin in St. Petersburg in 2001. Since 2016, they have opened their first studios outside of russia — in Spain, Sweden and Belarus. In February 2020, the company was acquired by Embracer Group in a deal worth $525 million. And in August 2020, Saber Interactive acquired Ukrainian 4A Games for $35 million.

Neither Fractured Byte nor 4A Games have yet responded to this officially.

• With the help of open source code, it will be possible to create analogs of Diia or other similar application. To do this, anyone can join the public license, find open source code and join the license on a separate website.
• In addition to the base code of the server and mobile parts of the application, the Driver’s License document and the Criminal record service were also added as examples of the logic of the application’s work with data. Over time, there will be more services and documents.
• Open-source is one of the popular global practices. European covid-certificates and the European digital identity wallet were made using this approach, as well as the Linux, Android, and MySQL companies.

With open source code and documentation, we will be able to quickly export Diia to other countries. Open-source products are about transparency, which will also be a good signal for our partners. The world’s top products work on open source. For example, we built the Trembit system, which is responsible for fast data exchange between registries, based on the Estonian Open-source application X-Road,

Mykhailo Fedorov, Minister of Digital Transformation, said.

What is the Diia app?

Diia is a Ukranian brand that combines a mobile application with access to citizens’ digital documents, and a single portal of public services for the population and business. The main goal is to make 100% public services available online. There are over 21,7 million users of the Diia portal by now — over 70 government services are available online.

Mobile application Diia allows Ukrainians to access 14 digital documents (ID card, foreign biometric passport, student card, driver’s license, vehicle registration certificate, vehicle insurance policy, tax number, birth certificate, IDP certificate) and 21 services in total. All digital documents in Diia now have the same legal force as their plastic or paper counterparts. Using the Diia app, Ukrainians can also share digital copies of the documents, and pay debts or fines.

I wish to be able to exchange this for Russia never attacking Ukraine, never invading our cities. I wish to be able to exchange this for Russian not killing 10,000 of my fellow Ukrainians. I wish for them to release all the hostages, all the soldiers who are protecting their land, all the civilians who are in their jails. But I cannot change history. I cannot change the past,

Mstyslav Chernov said in a traditional speech during the presentation of the statuette.

The full list of winners at the Oscars 2024

• Best Film — Oppenheimer by Christopher Nolan
• Best Director — Christopher Nolan, Oppenheimer
• Best Actor — Cillian Murphy, Oppenheimer
• Best Actress — Emma Stone, Poor Things
• Best Documentary Film — 20 days in Mariupol
• Best Animated Film — The Boy and the Heron by Hayao Miyazaki
• Best Supporting Actor — Robert Downey Jr., Oppenheimer
• Best Supporting Actress — Dwayne Joy Randolph, The Holdovers
• Best Original Screenplay — Anatomy of a Fall
• Best Adapted Screenplay — American Fiction

20 Days in Mariupol became the first Ukrainian film by a Ukrainian director to be nominated for the Oscars since the independance. In 2022, the film A House Made of Splinters by Danish director Simon Lehreng Vilmont, co-produced by Denmark, Sweden, Finland, and Ukraine, was nominated for the best documentary film.

The documentary film 20 Days in Mariupol is the work of Ukrainian military correspondent and writer, AP videographer Mstyslav Chernov. It captures 20 days of the siege of Mariupol in February and March 2022, after the start of russia’s full-scale invasion of Ukraine.

The film was produced in cooperation with Associated Press and Frontline. The premiere took place on January 21, 2023 at Sundance, the largest independent film festival in the United States, where it entered the World Documentary competition program and received the Audience Award.

Grammarly was founded in 2009 by three Ukrainians: Maksym Lytvyn, Oleksiy Shevchenko, and Dmytro Lider. In 2021, the company attracted $200 million in investment, which valued Grammarly at $13 billion. Subsequently, Lytvyn and Shevchenko became dollar billionaires. In 2021, Shevchenko and Lytvyn’s shares were estimated at $4 billion each, in December 2022 — $2.2 billion.

The current numbers:

• Shevchenko and Lytvyn occupy the 1644th place in the list of the richest people in the world.
• A year ago, they were on 1322 and 1333 places, respectively.
• Grammarly’s estimated market capitalization is now $8.1 billion.
• Last year, the capitalization amounted to $9.8 billion.

Possible reasons for the drop:

• The overall decline in the startup market: in 2022, the assets of 44 Forbes unicorn founders decreased by $96 billion.
• Decline in venture capital investment: global venture capital investment fell by 35% in 2022.
• Layoffs at Grammarly: in early February 2024, the company laid off 230 specialists (5% of its workforce).
• Slowing revenue growth: Grammarly’s revenue grew by 24% in 2023 (to $125 million), but growth slowed by 10% compared to 2022.

More on the layoffs: Recently, the news started circulating that 230 members of the Grammarly team were laid off, 37 of whom were in Ukraine. The company noted that the restructuring was not related to the costs optimization, Grammarly’s business remains profitable and continues to grow.

• Roman told DOU journalists that in the USA the team will focus on attracting leaders and the local community through the organization of events, because they see great potential in strengthening ties with local startups and investors.
• For example, on February 21, the company held an event attended by 120 YC W24 founders. It was aimed at investing in the development of the startup network in San Francisco. This is a key benefit of working in this city, according to the Awesomic team.
• There are no plans for job openings yet. The location was created for meetings with clients and investors, as well as for corporate events. As for the office in Kyiv, it continues to operate as usual: 25 specialists are currently working from there.

Awesomic is a Ukrainian startup that develops a platform for connecting companies with proven graphic designers. Most of the designers on the platform are from Ukraine. AIN.Capital reminds our readers that in March 2023, the startup raised $800,000, among the investors were people from Y Combinator.

MITS objectives 

• To become a driver of Ukraine’s defense tech ecosystem.
• To help young tech companies find partners and scale up.
• To provide the Armed Forces of Ukraine with access to the best defense technology products.

What MITS offers to startups

An investment of $200,000: $100,000 in direct investment in the company and $100,000 in acceleration through the MITS international defense tech accelerator.

A business program developed jointly with American University Kyiv and Arizona State University:

• Business Thinking Development;
• A practical component taking into account the peculiarities of the defense industry, including access to a global network of highly qualified mentors and specialists.

Post-accelerator support:

• Preparation for export;
• Attracting foreign investment;
• Cooperation with the BRAVE1 defense technology cluster and the Ministry of Defense of Ukraine.

Categories of startups supported by MITS:

• Terrestrial robotic systems;
• Unmanned aerial vehicles;
• Unmanned ground vehicles;
• Unmanned underwater vehicles;
• Electronic warfare (EW) equipment;
• Communication, optical and acoustic reconnaissance means;
• Military transport;
• Mine action/de-mining;
• Software and AI;
• Ammunition;
• Equipment of the “soldier of the future”.

Applications for participation in the acceleration are being accepted from February 23 to March 14, 2024 via the link.

The team:

• Founders: a group of U.S. investors with significant defense and investment experience, led by Perry Boyle.
• Supervisory Board: Dr. Philip Karber, former Strategic Advisor to the US Secretary of Defense, NATO Secretary General and governments, and Ernest J. Herold, former Deputy Assistant Secretary General for Defense Investment at NATO.
• Board: David Bonfili, Monique Brown, Anton Melnyk, Alina Lovchynovska.
• Strategic partner: American University of Kyiv.
• Coordinators: Lyudmyla Dolgonovska and Yuriy Bots.