At events and meetings, we are often asked the same question: how did the war affect investment in Ukraine's technological and real sectors? And every time we get a little confused, because we simply do not remember a time without war.

Nine years ago, in 2014, after the start of the conflict, the first seven members of the then-future association met to discuss the next steps. As the participants of the meeting recall, the question was whether to leave or stay. And after heated discussions, the decision was made to stay. And not just to sit on the sidelines, but to invest money here, develop portfolio companies, and do everything possible to promote Ukraine in the investment environment.

On November 14 the results of the meeting took shape. The Ukrainian Association of Venture and Private Capital was established to consolidate the scattered forces of domestic investors and attract foreign ones. The second point was to be achieved by popularizing co-investment, which we are still pursuing.

Investments and Ukrainian startups are on everyone's lips today. They are written about in the news, and discussed at conferences and summits. Nine years ago, everything was different. The venture industry was like trying to plant a tree in the desert. There was a shortage of funds, and you could count them on your fingers. But there was good news: the crisis wiped out the weak and uncertain players. Today there are over five dozen funds in Ukraine, and all of them have a firm grasp on what they do.

We started as a humble association with a dozen members. Today there are 50 of them, nine of whom joined this year, in the middle of the crisis. Moreover, UVCA members manage approximately $5 billion. These are impressive numbers that we could only dream of at the time.

Has it gotten better over the years? Our answer is clear — yes. First, there is a whole new generation of talented managers, investment funds, incubators, accelerators, and, most importantly, young entrepreneurs capable of creating internationally recognized products. After many years, an ecosystem that can support innovation and talent development has emerged in Ukraine.

Secondly, dry numbers are not lagging. According to our data, since 2014, more than 2,000 deals have been concluded with Ukrainian companies. The process has not been at a standstill even for a single month, but only on the rise. As a result, Ukrainian products have attracted $3.7 billion over nine years.

Another example. From early 2022 to the first quarter of 2023 alone, we recorded 199 deals for $881 million (actually, the amount is higher, as many deals do not disclose investment amounts). The total valuation of Ukrainian startups has grown by 703% over the past five years. Moreover, Ukraine ranks 6th in Central and Eastern Europe in terms of venture capital funding, according to the 2022 results. Not bad.

All of this has been achieved thanks to our joint efforts, to which we have contributed a great deal as well. At the moment, Ukraine is going through another challenge, and we do not doubt that sooner or later it will come to an end. And since that is the case, let us conclude with a little reflection on the future.

Let us start with private capital, which will play a growing role (if not a key role) in the near-term recovery of Ukraine.

The second piece of good news is that venture capital has continued to accept and share risk over the past nine years. Investors care primarily about deal quality, then geopolitics. You will be surprised to hear that Ukraine has decent credibility thanks to numerous successful co-investment cases. According to our data, 300 foreign funds are currently involved in such deals.

Finally, we expect the market to mature. For example, more and more product companies will be established instead of outsourcing. We also hope that the current boom in domestic defense technology will continue, and become a full-fledged industry.

In our view, the main risk remains war and its unpredictability. At the same time, the current situation helps to develop new opportunities as well as to intensify existing processes.

To sum up: Challenging times create strong teams and stimulate innovation. Unlike many others, for us technology is not just a matter of money or prestige, but also a matter of survival.

Andriy Kolodyuk, Chairman of the UVCA Supervisory Board together with Dmytro Kuzmenko, CEO of the Association