Interview with Ivan Petrenko about the state of the Ukrainian startup ecosystem and investment prospects for Ukrainian startups

We had the opportunity to talk with Ivan Petrenko, Managing Partner of Angel One, who shared his thoughts on the development of the startup ecosystem in Ukraine, the impact of the war on attracting investments and the forecasts for further investment in Ukrainian startups.

Interview with Ivan Petrenko about the state of the Ukrainian startup ecosystem and investment prospects for Ukrainian startups
Date of publication

In your opinion, to what extent is Ukraine developed in terms of the startup ecosystem?

I want to be optimistic, but it is difficult to say that we are a developed country in this context. However, Ukrainian startup market began to evolve and get back on its feet. Especially in pre-war times, it was possible to observe a powerful impetus to the development of a competitive ecosystem. The appearance of accelerators and organizations that supported this direction actively or venture capital funds, both foreign and Ukrainian, entering the market could serve as examples. In addition, the emergence of success stories of Ukrainian teams has played a crucial role for our domestic market, because they became an example for others and sowed the seeds of desire in the heads of young people to start creating their products and services.

How competitive can Ukrainians be in the startup world?

Definitely, we can be competitive, in particular, given that we have very hardworking people with a tangible technical background. We have very powerful engineers. However, we constantly lack the so-called soft skills, the ability to present ourselves, to sell in the broad sense of the word, to apply marketing, communication and fundraising tools.

We have every chance to be competitive, but this requires a lot of work, and a special contribution should be in the early stages, starting with schools and universities. We need to change programs, develop the skills of an innovative enterprise among young people and teach more practical things. And it is the massive emergence of business incubators and accelerators at universities that will provide young people with the opportunity to make their first mistakes and attempts to create and launch their products or services. Yes, not all of them will become entrepreneurs in the future, but they will grow up to be the people who will understand how and where to use these tools and knowledge.

What challenges does the war bring to the search for startups investing?

Undoubtedly, the war had a negative impact on the startup ecosystem. This full-scale invasion forced many teams to close startups or postpone their activities until better times. There are a number of reasons for this: someone left Ukraine, someone returned to a stable job, for example, in the IT sector. Many of them became volunteers, which is very typical for startuppers and appeals to their active position in life. Accordingly, the situation with investments has become more complicated, some grant funds have closed, for example, the Ukrainian Startup Fund has suspended the issuance of new grants.

Nevertheless, the market is gradually beginning to come to life. The most important thing in this story is the understanding that it is not so much difficult to find funds as it is to find a strong team that will offer a competitive product and have the ability to scale to global markets. Money awaits good teams. No teams - no funds.

Do the conditions of war become a verdict or is it still an additional incentive and motivation to find new opportunities?

This will be a verdict for those who have constantly had difficulties in working on their product. For those who always go to the end and look for new opportunities, these conditions will serve as motivation.

What are your predictions for further investment in Ukrainian startups? What drives Ukrainian and foreign investors to pluck up courage and invest in Ukrainian founders?

Everything will depend on when the war ends. And as soon as it is over, I am sure that a lot of investments will come to Ukraine, first of all - in infrastructure projects. And the competent use of one of the most powerful brands in the world - the brand of Ukraine - will attract additional investments for quite a long time, including the field of startups and innovations. So I think we'll be all right. We need to develop, invest, promote ourselves and build strong teams.