Ukrainian startups have shown incredible resilience during the ongoing war — but soon they might run out of fuel.
91% of Ukrainian founders now need financial support, while nearly half say they’d need an increase in revenue or new investment over the next three months to continue operating, according to a new report from TechUkraine, an organisation supporting the country's startups, and other partners.
Ukraine is the birthplace of many well-known European startups — such as Grammarly, GitLab, Preply and Firefly — and home to a vast tech talent pool. In February 2022, the month the Russian invasion started, Ukrainian IT exports amounted to $839m, 31% higher than January and 75% higher than February 2021.
The country’s IT sector continues to be the only industry in Ukraine that demonstrates growth in 2022. It’s even minted two new unicorns since February, when the war began — airSlate and Unstoppable Domain — while Preply, a language learning platform, raised $50m to scale up globally.
Financial support urgently needed
But the war is taking a toll on the companies: the financial state of Ukrainian startups is unstable, with almost half of them having a run rate of one to three months. Despite many public and private aid schemes targeted at the country’s startup sector, over half of the founders surveyed by TechUkraine said they hadn’t received any help since the beginning of the war. The help that they have received is mostly with their network, not financial support.
The operations of many tech companies have also been heavily disturbed by the war, with cities’ infrastructure damaged and many skilled workers joining the army or fleeing the country.
56% of startups continue their operations exclusively from Ukraine, while 95% of them remain in the country at least partially. The rest of their staff have relocated: the most popular foreign destinations include the EU and the US.
The war has also affected startups’ headcount: while 43% of teams remained the same size, 37% of founders have had to reduce their teams.
The survey was conducted between June and August, and received responses from 153 Ukrainian startups.