Despite the war, Ukraine’s startup ecosystem has ranked among the top three fastest-growing ecosystems in Central and Eastern Europe (CEE) and is the fourth most valuable (following Poland, Estonia, and the Czech Republic). What is the secret behind its success? How is it evolving? And does this mean that investing in Ukrainian startups will inevitably yield profits?
Progress despite the odds
I am convinced that major crises are often followed by periods of growth, and war brings not only challenges but also new opportunities. For instance, the systemic crisis of 1971–1975 spurred the development of microelectronics, computers, the Internet, and mobile communications. The financial crisis of 2008 drove the growth of fintech, fundamentally transforming commerce, asset management, and investments while also giving rise to Bitcoin. In today’s world — first shaken by the wave of COVID-19 and then by Russia’s war against Ukraine — startups, innovations, and AI have become the driving forces.
In CEE, which has felt the greatest impact of the war, Ukraine’s startup ecosystem has been making exceptional progress despite nearly 3 years of resisting Russian aggression. This is reflected in the ecosystem report my team at Civitta Ukraine prepared for the venture fund u.ventures.
The research, covering the period from 2013 to 2024, shows that IT’s contribution to Ukraine’s GDP has grown 5.7 times, and its share of the country’s service exports has reached 41%. Over this period, 8 startups with Ukrainian roots have achieved a valuation of $1 billion and attained unicorn status, including Grammarly, GitLab, Creatio, and others. At least 10 more startups are on the verge of reaching this milestone. During the war years of 2022–2023, Ukraine had over 2,300 active IT companies generating $14.06 billion in foreign revenue and paying 68.1 billion UAH in taxes. As a result, Ukraine has been dubbed a “digital tiger.”
I firmly believe that now is the time to invest in Ukrainian teams’ innovative solutions. Below, I outline several reasons why.
1) Since 2020, the combined valuation of Ukrainian startups has tripled!
The valuation of Ukrainian startups surged notably during the COVID-19 era. In 2017, their valuation was estimated at €2.9 billion; by 2021, it had skyrocketed to €27.1 billion. However, Russia’s full-scale invasion of Ukraine impacted this trajectory, bringing the valuation down to €23.3 billion. This figure could have been significantly worse, as the war has paralyzed and complicated many areas of life and the economy. However, Ukrainian IT has demonstrated remarkable grit.
The most attractive investment opportunities are concentrated in E-commerce, FinTech, EdTech, AgriTech, HealthTech, and DefTech sectors. Notably, investments in Ukrainian startups have demonstrated a better cost-to-value ratio compared to U.S. startups. Ukrainian startups generate five times more revenue per invested U.S. dollar compared to their American counterparts, whose valuations are six times higher than those of Ukrainian startups.
2) Ukrainian startups attracted $310.5M in 2024
Between 2020 and 2022, the value of Ukrainian venture and private deals nearly doubled, driven by the increasing activity of both local and international players. In the first year of the war, Ukraine ranked 6th in Central and Eastern Europe (CEE) for venture funding value. This is especially impressive, considering Ukraine has almost 7.5 times fewer venture funds than Poland.
The positive trend continued through 2023–2024, with Ukrainian startups closing 44 major deals ranging from $200K to $200M. Over the past year, the total volume of investments in Ukrainian product companies reached $310.5M. This figure is comparable to the markets of Estonia and Lithuania in 2024, where preliminary estimates place investments in local ecosystems at €347 million and €427 million, respectively.
Among the standout players are teams like Creatio ($200M), Carmoola ($19.6M), and Viseven ($10–30M, with an estimated range), which account for 80% of the total investment volume secured by Ukrainian teams. These successes underline the resilience and potential of Ukrainian startups, even amid challenging circumstances.
3) Ukraine has a robust ecosystem that is recognized internationally.
Building a full-fledged startup ecosystem is a task that Ukrainian governmental and non-governmental organizations are actively pursuing — despite the backdrop of enemy missile attacks, the ongoing work of air defense systems, and frequent power outages. It’s hard to imagine how innovation can exist and evolve under such conditions.
Indeed, in 2022, 12% of startups ceased operations, and nearly half described the working environment as highly challenging. However, despite the significant negative impact of the war, Ukraine’s startup ecosystem is recovering and advancing rapidly, ranking 46th among the world’s top ecosystems. By 2023, over half of startup founders viewed the situation positively, and 41% of teams began expanding their workforce.
This recovery was possible mainly due to substantial international support, which stimulated business development and bolstered the economy. Additionally, the extraordinary motivation of Ukrainian developers has been a critical driver of progress. Overall, 90% of Ukrainian startups now see potential for growth within Ukraine.
4) Ukraine has become a leading global hub for DefTech solutions
Russia’s war in Ukraine has triggered a surge in the development of DefTech solutions within the country. This sector is actively funded by the government through the launched BRAVE1 cluster and by non-governmental organizations from Ukraine and other countries. Specifically, between 2023 and 2024, a total of $42 million was allocated in the form of investments or grants.
A significant advantage of Ukrainian DefTech startups lies in their access to real-world testing. Most of these solutions undergo rigorous trials under harsh military conditions in the East and South of Ukraine, which undoubtedly helps to improve the products and enhance their competitiveness significantly. This practical experience and constant refinement give Ukrainian DefTech solutions a unique edge on the global market.
5) Growing number of skilled IT Professionals from Ukraine
Over the past five years, the number of IT professionals in Ukraine has increased by 78%, reaching 346,000 specialists. Most of these are technical experts with over three years of experience. Their expertise spans across MarTech & Media, FinTech & InsurTech, HealthTech & Wellness, and more.
Today, Ukraine is ranked in the top 5 of The Good Country Index for its contribution to the development of science and technology. This makes it one of the best European countries for doing technology business and offers ample opportunities for growth.
Additionally, Ukrainian IT companies maintain close partnerships with firms in the U.S., the UK, Israel, and Germany, exporting their services to over 40 countries worldwide. This combination of technical excellence and international collaboration makes Ukraine a valuable hub for IT talent.
Will 2025 become a landmark year for investments in Ukraine?
Every developing ecosystem inevitably faces its own set of challenges. For Ukraine, these include a lack of business knowledge among startups, a limited number of accelerators and support programs, a shortage of qualified and experienced business angels, and restricted access to “smart” investments at the early stages.
Despite these hurdles, the Ukrainian startup ecosystem demonstrates remarkable resilience and positive dynamics. Year by year, more organizations are stepping in to foster its growth. Hackathons are becoming more frequent, and the number of accelerators and programs supporting startup founders is steadily increasing. Local investors recognize innovation’s transformative power and are becoming more actively engaged in venture financing.
The Ukrainian government is also gradually shaping an innovation policy, focusing on key areas such as the defense industry. The rapid growth of startups reflects the ecosystem’s responsiveness to these efforts. Founders are not only striving to develop solutions within Ukraine but are also working to scale their innovations to the global market.
Looking ahead, 2025 has the potential to become a landmark year for investments in Ukraine’s startup ecosystem. Such investments promise financial and reputational returns and a significant contribution to driving global innovation forward.
