The Ukrainian Venture Capital and Private Equity Association (UVCA) and the audit and consulting company Kreston Ukraine present the annual review “Ukraine venture capital and private equity markets overview 2020” that also includes data for 8 months of 2021.
According to the results of 2020, Ukrainian technology companies had 188 deals with investors worth USD 533.5 million. About 50% of the deals were small grants (25 and 50 thousand USD) from the Ukrainian Startup Fund. During the 2020—2021 years, the Fund has invested USD 5.3 million in Ukrainian projects.
Just three years ago, there were no unicorns among startups in Ukraine. Nowadays, there are already five of them — Gitlab, Grammarly, Bitfury, People.ai, and Ring that have totally invested USD 1.3 bln and right now have a strong position on the global market.
In this review, we have analyzed the key market trends, such as “investment focus on software projects”, “increase of foreign investors in the Ukrainian market”, “growing quality of Ukrainian startups and their interest in smart money”. The key drivers and barriers of the market development were identified — the respondents noted that despite the imperfect regulatory framework, the country has still enough private capital to promote the sector.
In general, all market players are unanimous in their forecasts and are quite optimistic about further market development. 81% of venture and 67% of private equity investors consider that the indicators are likely to grow and high-tech industries traditionally remain the most perspective ones.
First of all, among the key factors for investment decisions, Ukrainian investors point to the experience and qualification of the team (according to 94% venture and 17% private equity investors surveyed) and the market potential of the business idea (according to 82% venture and 83% private equity investors surveyed). Startups consider their industry expertise, investment conditions, and ‘smart money’ they can get, when choosing an investor.
The study results show that Ukrainian companies offer attractive, relevant and globally competitive solutions and demonstrate sustainability and adaptability in the conditions of COVID-19. Ukraine is gradually transforming from an exporter of talents and ideas into a big international venture capital market player.
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