How has the war impacted Ukraine’s venture capital market?

With the onset of the Russian full-scale invasion, many foreign investors halted their funding of Ukrainian startups due to heightened risk and instability. Some companies relocated their operations abroad to maintain access to investment and grants. However, instead of collapsing, the ecosystem adapted, and foreign investors are once again turning their attention to Ukrainian startups.

The main changes in investment strategies include:

1. A greater emphasis on the profitability of startups and their focus on global markets.
2. Increased interest in strategic industries, such as defense technology, cybersecurity, artificial intelligence, and deep tech.
3. Collaborative investment and syndicates to distribute risks.

These are the sectors that currently remain promising for investment:

1. Military technologies that assist Ukraine on the battlefield and have potential in international markets.
2. The rise in cyberattacks has heightened demand for security solutions, with AI products being used to enhance business processes and defense systems.
3. Innovation that integrate commercial and military applications.
4. Complex scientific and technical solutions, as well as global B2B products with high demand, which are helping Ukraine to maintain its position as a technological player on the world stage.