December 25, 2022

Research results from USF and Polish-Ukrainian Startup Bridge in partnership with GPW: The impact of war on the Ukrainian startup ecosystem

The Ukrainian Startup Fund and Polish – Ukrainian Startup Bridge in partnership with the Warsaw Stock Exchange (GPW) have completed a survey on the impact of a full-scale Russian invasion on the Ukrainian startup ecosystem.

All Ukrainian startups were invited to participate in the survey – even those that stopped their activities after February 24, 2022.

In addition to key figures, the report contains information about the needs, challenges and opportunities for the development of Ukrainian startups. As well as the stories of teams that, despite the war, decided to develop and support Ukraine in this difficult time and during the period of reconstruction after the victory.

Key results of the research:

The beginning of the full-scale war has significantly slowed down the development of the startup market in Ukraine.
The most popular form of doing business for startups is a limited liability company.
Startups operate mainly in cities with a population of over 100,000 inhabitants.
Most startup managers assess their current situation as bad. 12% of the surveyed companies stopped their activities after the Russian invasion.
Most startups operate in a global context – both on the Ukrainian market and abroad.
The immediate reasons for the closure of companies were reduced sales of products and services on the Ukrainian market; inability to travel outside the country (necessary for doing business); loss of resources to maintain financial solvency.
65% of startups in the analyzed sample have not resorted to layoffs since February 24. 35% of companies have fired some employees. At the same time, 48% of the surveyed companies were forced to significantly reduce the level of remuneration.
Since the beginning of the full-scale war, almost 40% of startups have not taken any measures related to the search for funding for their activities. In one third of cases, companies tried to raise funds, but unsuccessfully.
61% of respondents did not change the location of the company’s head office after February 24. Almost 1/3 of entrepreneurs were forced to relocate.
In addition to financial resources, the competencies of project teams are also crucial for the development of startups. The key gaps in them are: deficit in sales (44%), marketing and investment financing (33% each).
At the same time, both employees and owners of Ukrainian startups are optimistic about future changes in the ecosystem. 75% of respondents believe in the growth and development of their (and similar) activities.