“The startup ecosystem in Ukraine is on the rise,” said Julia Bialetska, CEO & co-founder of S.Lab, a company that creates sustainable packaging solutions from agricultural waste. Bialetska was one of the speakers on a panel dedicated to Ukrainian startups at the third edition of the Ukraine Resilience Business Forum, organised by the Luxembourg-Ukraine Chamber of Commerce (LUCC) in Kirchberg on 5 March 2025. “At the moment, we have around 3,000 startups in Ukraine,” with unicorns like Gitlab, Bitfury and Grammarly. “It’s definitely an ecosystem that is developing,” she continued, and the infrastructure that is being created around Ukrainian startups--incubators, acceleration programmes, startup funds, research and development in universities--is helping it to be integrated into the European ecosystem. “In 2024,” she noted, “Ukrainian startups raised more than €300m.”

“The Ukrainian IT industry is ready to fight for a place in Europe, and to maintain Ukraine’s reputation as one of Europe’s top countries for IT services,” said Olga Ksonzenko, government relations director at Sigma Software Group. “For us, it’s a big motivation to continue doing something for the IT ecosystem.” The company contributes to developing Ukrainian tech talents through Sigma Software University and supports initiatives encouraging more women to enter cybersecurity and technology. The CodeUA initiative, launched at Web Summit 2023, connects Ukrainian tech companies with global businesses. And in the defence sector, the accelerator programme Defence Builder--backed by Sigma Software Labs, the country’s defence ministry, Kyiv School of Economics and Buntar Aerospace--supports Ukrainian startups active in electronic warfare, drones, communication and software by providing funding, training and military engagement.

Challenges…

And all of this is happening against a backdrop Russia’s full-scale invasion. How has the war had an impact on startups? “Of course, everything changed,” replied Pavel Panasjuk, COO & co-founder of H+H Labs, part of Hydratico, a company that works on desalination and water purification. “You wake up one day and you already know that the world you lived in doesn’t exist anymore. That was a huge reality check for all of us. We understood that this war was going on for a very long period of time, but one day it became the centre of life of absolutely everyone in Ukraine.”

“So from this perspective, we are no different from any other setup. We faced exactly the same challenges, be it logistics, disruption of supply channels, people you were able to call yesterday no longer being available now because they’re in the army. These are the things which became reality for practically everyone. [Some investors] are not ready to talk to you anymore because they say it’s too big of a risk to invest in a war zone. Luckily, we were quite resilient in that regard,” said Panasjuk, who explained that a Polish investor company continued to support them. “Surprisingly, our largest challenge didn’t come from these logistics or war-related issues when we were entering a more mature stage. It was the lack of understanding of what we’re doing.”

The European Environment Agency notes that, in 2022, water scarcity conditions affected 34% of the EU population and 40% of its land area. But “in Europe, we still live under the impression that a glass of water will always be on the table, and this is [the idea] we are fighting right now. We’re trying to break this understanding of a given reality that we will always have access to clean water,” said Panasjuk. “These are things we want to educate our customers, our potential clients about.”

For Ihor Kobzar, CEO & co-founder of Funely AI, an artificial intelligence-powered digital marketing platform for SMEs, it was his first time outside of Ukraine since the onset of the full-scale war. Under martial law, men between the ages of 18 and 60 are only allowed to leave the country under certain circumstances. “I’m located in Kyiv,” he explained. “If you are in Kyiv and you are under a ballistic missile attack, you have around three minutes to get to the parking lot,” or at least to get away from windows and glass. These Russian missile attacks often happen at night. “So you don’t sleep the whole night; you’re monitoring different information channels… you can’t plan in advance.” said Kobzar. “I remember a couple of months when they did it each day in a row,” making it impossible to sleep or work properly.

That’s one challenge. A second challenges concerns resources. “I would say that we see that the level of interest from investors decreased since the war started. Because the risk is higher, the interest is lower.” Added to this is the challenge of travel limitations, which makes it more difficult for people building global businesses to connect to a global network. But “we see a lot of businesses that started and continue to work during the war,” he added. “So despite the challenges, we are still resilient, still working, still selling, paying taxes and hiring people.”

When it comes to key challenges, Softbees CEO and co-founder Tatyana Dashevska highlighted two. “The war has reshaped the fintech landscape in Ukraine, pushing us to accelerate international expansion while maintaining strong roots at home. One of the biggest challenges is navigating complex regulatory requirements in Europe while ensuring compliance. Entering the European market also comes with the challenge of building a strong reputation. Establishing credibility requires working with trusted partners, and we see organisations like LUCC as key allies in this process.”

“Another key challenge is fully remote work,” she added. “We transitioned to a fully remote model built entirely on trust and results-oriented performance. Today, our team consists of 30 people across different countries. Every time we onboard a new team member, we emphasise our core principles of trust and results-driven work. We don’t track minutes or hours spent online--we track the speed and quality of completed tasks. After three years, this approach has proven its efficiency.”

…and opportunities

There seems to be a “geographical transformation” around the companies, said Pascal Fabing, a private sector expert at Luxdev, the Luxembourg Development Agency, with teams relocating staff abroad. One-third of startups recently founded by Ukrainians have been registered outside the country. “It seems that two-thirds of Ukrainian startups work with teams that are located in at least three different countries, which is indeed huge.” It’s both a challenge and an opportunity, allowing startups to accelerate their internationalisation and focus on international markets.

There has also been a shift in sectors. “Figures show that there are around 22% of companies that are in the defence and military sector, whereas in 2021 it was only 3% of companies in that sector,” said Fabing. “Finally, [there are] also changes in financial models.” A lot of startups are blending financing, grants and investments.

Global tech hubs and incubators also play a role in international scaling. “Global tech hubs provide essential networking, mentorship and access to funding,” noted Dashevska. “Programmes like Seeds of Bravery and LUCC initiatives help us connect with European partners and gain credibility in new markets.”

Launched as part of the European Innovation Council and led by a consortium of 19 organisations in 12 countries (including the Luxembourg agency Luxinnovation), Seeds of Bravery aims to support Ukrainian tech companies and integrate them into the EU’s innovation ecosystem. Kobzar’s company, Funely AI, was named a winner in the deep tech incubators programme last year; S. Lab and Hydratico were beneficiaries of the deeptech scaleup & acceleration programme.

“Ukrainian startups are the most resilient in the world. Don't be afraid to invest in Ukrainian businesses!” Dashevska said after the panel. Ahead of the Nexus2050 tech conference in Luxembourg in June 2024, Dashevska told Paperjam about . “It’s been 10 months since Softbees was first introduced at Nexus 2050, and during this time we have been working intensively on our new product. By spring 2025, we are launching a next-generation fintech-as-a-service Saas platform that leverages cloud and AI technologies to help licensed financial and payment institutions scale faster and operate smarter.”

Ukraine is now an “ocean” of opportunities

What would Ukrainian startups like to see from the Luxembourg ecosystem?

“Keep supporting us as much as you can,” replied Bialetska. “I like this phrase that Europeans say, that everyone says: you stand with Ukraine. You have to realise that Ukraine is standing as a shield, and helping the frontline, of course, is the key question. But helping startups that then can contribute back to the economy is also key.”

“Every Ukrainian right now is a diplomat, because we represent our country and we tell our story about what’s going on in Ukraine, about our experiences,” added Panasjuk. “This is a learning experience, and startups are bringing a very important part into this story, into this interaction between us. We are diplomats through technology. We bring you our ideas; we bring you our knowhow,” he explained. “We can solve problems which are common, both for the European Union and Ukraine.”

“My suggestion or advice,” said Kobzar, is “don’t go to an overcrowded market. Try the blue ocean. Ukraine right now is kind of a blue ocean of opportunities, because there is not so much competition. So if you are developing your own business or investing in something, consider Ukraine as a great opportunity.”

“One of the key successes of Ukraine is the people who continue working, no matter what it’s like,” noted panel moderator Inna Perepelytsya, a senior advisor in startup relations at Luxinnovation. “One of my friends told me: ‘I don’t know what Putin has in mind in terms of missiles today, but I need to do XYZ in production.’ And she means it.”

“Resilience is not some empty word for us,” concluded Bialetska. “It is something that is in our DNA. We are so resilient that we can overcome basically any obstacle, anything that will come our way.”