Reflecting President Volodymyr Zelensky’s claim that Ukraine is “the most attractive startup in the world,” the government embarked on a new $18 million funding program for Ukrainian tech entrepreneurs.
Aiming to support the country’s most promising local startups, the state-financed Ukrainian Startup Fund (USF) launched operations on Dec. 2, 2019. Since then, over 1,000 startups have submitted applications.
The fund has shortlisted 12, and by Feb. 7 it will decide how much money to grant each one of them. The grants will range from $25,000 to $75,000 and will support the development of their ideas.
Local investments for local startups
Ukrainian startups are recognized globally: they showcase their products at the world’s biggest tech show, CES in Las Vegas, can raise thousands of dollars in one day on Kickstarter and are preparing to participate in Startup Grind Global 2020 in Silicon Valley.
Besides, at least two tech startups with Ukrainian roots – Grammarly and Gitlab – have already become so-called “unicorns,” with valuations over $1 billion.
But according to Ukrainian Startup Fund expert Oleksandr Yatsenko, the country can produce many more successful tech firms with a little bit of local support, as on the global market it may be hard for Ukraine-based enterprises to compete for angel investors or big foreign funders.
That is why Ukraine has launched the state fund to support local startups while not getting any shares in the businesses or intervening in their work. To receive the grant, a startup has to meet some major requirements: to be Ukrainian, be in pre-seed or early-seed stages, have prototypes of future products and be commercially oriented.
“For Ukraine, it’s the first try, which has been in development for about three years,” Yatsenko said. “It’s good that the fund has started working, and I think it has already set a high bar.”
First winners
The USF shortlisted 12 startups in different categories, ranging from fashion and ecology to banking and agriculture, and listened to their idea pitches on Jan. 25.
The fund then ranked the startups and awarded first place to AeroDrone, which creates autonomous unmanned aircraft, or drones, that can fertilize plants and spray chemical plant protection agents four times more effectively than any land machines currently used in the agriculture industry.
The company already has created a prototype and applied for a $50,000 seed-grant. As the CEO of AeroDrone Yuri Pederi told the Kyiv Post, the startup decided to go for the grant to increase the scaling and mass production of the product.
“There is a great demand for our technology, so we work to meet it,” Pederi said.
The second place in the USF ranking was awarded to GeoDesign.info, a startup that uses big data to determine the best place to open a business.
Startup BIOC, which was ranked third, can create bioplastics that are more eco-friendly and easier to produce.
Though the level of the startups varies greatly, all of them are ready to move forward, according to Yatsenko from the Ukrainian Startup Fund.
The USF promises to raise its budget and give out more grants to local projects in 2020. Meanwhile, the next round of startups will pitch their ideas to the fund at the end of February.
