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Ukrainian IT companies attract up to $1 bln in venture investments in 2022 – Deputy Minister
KYIV. Feb 24 (Interfax-Ukraine) – Ukrainian IT companies attracted about $1 billion in venture capital investments in 2022, mainly investments from foreign companies, while the activity of most Ukrainian companies from other sectors that invested in IT development before the war fell to zero, Deputy Minister of Digital Transformation for IT Development Oleksandr Borniakov has said.
“I won’t give a clear figure. I can assume that last year it reached $1 billion (the figure of venture investments in IT) even in conditions of the full-scale war,” he said in an interview with Interfax-Ukraine.
According to him, since the beginning of the war, the interest of venture investors in the sector has declined sharply, but activity resumed in the summer. In particular, the $50 million Blue & Yellow Heritage Fund (the first venture fund of U.S. Venture Capital to work with Ukrainian IT projects) was founded. It is also known that several foreign funds are ready to invest over $10 million each, the Deputy Minister added.
“Today, I don’t see people in Ukraine who would provide funds for this. Imagine that before the war, the same DTEK and Metinvest had groups that were engaged in innovations and investments. However, I don’t think that against the background of how much objects have suffered due to the full-scale Russian invasion, these groups have funding. Kyivstar, Vodafone, the Pinchuk group had similar projects. Now most of the projects are being phased out,” Borniakov said.
He added that about $15 million was attracted as grants and donations. Approximately half a million dollars in grant support was provided by partners from USAID CEP, WNISEF, GIST, EIT Raw materials, YEP. About $40 million of investment since the start of the full-scale war is estimated by Google, grants for services were also provided by Microsoft and Amazon.
According to Borniakov, the top three areas of interest to investors include web3, mil-tech, and artificial intelligence.
The Deputy Minister did not make any forecasts regarding possible investments that could be provided for the IT sector in Ukraine in 2023, noting that “much will depend on the situation with the war.”
“However, with the initiative that we are launching (mil-tech startups), if everything is done correctly, even more funds (than in 2022) can be raised,” he said.
