We are finishing off this week with the Ukrainian PE & VC Summit M&A panel highlights featuring Andrii Nosok, Paweł Szreder, Anna Zorya, Jacek Chwedoruk, and Ruslan Furtas. Let’s see what interesting was over there.

For now, most of the top funds have excluded Ukraine from the list of massive capital allocations. The main reasons — war, insurance, and market size. For example, a transaction should be at least $100 mln to interest Poland players, and right now there’s a lack of such assets in Ukraine. Western Europe has an even bigger appetite, thus Ukraine companies have to greatly improve valuations.

To boost private M&A activity, Ukraine should also show good examples of government-organized auctions first. The rest will eventually follow. Besides, we need to think about proper insurance and due diligence. There’s no need to hide risks, but rather embrace them, focusing on the upsides. As per the industries, Ukraine has potential in military enterprises M&A like consumer firearms and infrastructure.

Optimistically, after the war ends, Ukraine would need up to ten years to make it happen. What should be done by the officials? Let’s start with creating a real stock exchange, and pension funds, putting government money into PE funds, and popularizing investments among the population.

Ukrainian players, however, resumed M&A activity already in the summer of 2022 when Russian troops withdrew from the north. There’s a shortage of capital in Ukraine, and the locals do the majority of M&A activity, using the opportunities as foreign companies leave the market. Because of that, the international funds who are willing to invest in Ukraine can have the luxury to get the best companies.

After the war ends, some speakers await a lot of international financial activity down here. Business consulting, for example, already receives many requests from clients for advice on doing business with Ukraine, organic entry to the market, and local partners. In other words, now is a good time to prepare for M&A.

Also, there are many inbounds for big Ukrainian tech companies because such businesses are resilient versus risks like war, corruption, and state interference. Interesting point: if you manage to drive investors to Ukraine in person, there are more chances to receive their approval. Remote communications don’t work well. There are more bad perceptions rather than real difficulties. On the ground, the situation doesn’t look grim.