UKRAINE Trends and Developments Contributed by: lllya Tkachuk, Igor Krasovskiy and Inna Kostrytska, INTEGRITES
Military tech (MilTech) MilTech is currently experiencing an unprec- edented boom. Indeed, many IT specialists channelled their efforts into the development of defence projects. For example, start-ups which, before the war, used to develop drone management software for peaceful purposes like delivery of goods or field aeration, switched to manufacturing drones for military purposes. As a result, a number of MilTech companies reached the next level of development in a dif- ferent specialisation, including multi-purpose aero vehicles of different types, anti-drone tech- nologies, robotic systems, and software systems aimed at operating the above mechanisms. In 2023, the first Ukrainian MilTech VC fund named D3 was created. Also, in 2023 the gov- ernment of Ukraine launched the first platform to promote collaboration between all interested parties in MilTech by providing them with organi- sational, informational, and financial support. The total investments in MilTech (including grants) in 2023 is estimated at almost USD7 Fintech and cryptocurrency start-ups have shown remarkable growth in Ukraine over recent years which has been driven by macroeconomic reasons and various government incentives for providers of digital and innovative products. A relatively new law on virtual assets (which is yet to take effect) is another significant step tak- en by the government in its effort to shine light on the shadow crypto economy and embrace all benefits of fintech and cryptocurrency technolo- million. Fintech
first month of the war, the authors have heard of several cases when export-oriented companies lost workload due to the uncertainty about the capacity to complete projects. However, in 2023 and 2024 this segment managed to recover and remained rather strong. At the initial stage of war, the companies provid- ing service mostly to Ukrainian customers suf- fered much more. This, in particular, relates to marketplaces, ridesharing, and logistics applica- tions, classifieds and others which had to opt for cost reduction steps, including staff redundancy. However, in 2023 and 2024 a substantial part of these companies adapted their activity to the new reality, while some of them even showed growth. At the same time, many IT companies faced another challenge which is the drafting of their employees to the Armed Forces. This includes those who voluntarily joined the military, as well as those conscripted to the Army. To minimise the impact of this risk, numerous IT companies applied for the reservation of employees from the military mobilisation. In view of the strong support from the Ministry of Digital Transformation and advocacy efforts made by business associations, most IT companies suc- ceeded in reserving a part of their employees. Since the general rule allows reserving up to 50% of employees, this risk has decreased by half but has not been mitigated entirely. The reservation of employees also allows them to travel to other countries which facilitates the business activity of such companies. However, the general rule of the martial law in Ukraine still restricts the possibility for men aged between 18 and 60 to cross the border.
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