Survey: 12% of Ukrainian startups shut down, 30% moved abroad at least partially during the war

Teaming up with the Ukrainian Startup Fund, the Polish-Ukrainian Startup Bridge conducted a survey about Ukrainian tech sector amid the war.

Answers from 84 Ukrainian startup founders were received and analyzed in a report that has just been released.

In addition to understanding the impact of the war on startups, the study also aimed to indicate what kind of support Ukrainian innovators actually need.

Key findings

• The outbreak of the war significantly slowed down startup development in Ukraine. Only a handful of respondents founded their company after the war started, while 68% did so in the three preceding years (2019-2021). Almost all respondents noticed a definitely negative impact of warfare on the possibility of running their business. 
• The majority of Ukrainian startups operate both on the Ukrainian market and globally. For many of them, foreign customers were their chance to survive amid Ukraine’s difficult situation. 
• Twelve percent of the surveyed companies stopped their operations after the Russian invasion. This was due mainly to the decrease in sales of products and services on the Ukrainian market, the inability to do business trips outside the country, and the loss of financial resources. 
• While only 35% of the surveyed companies laid off some employees, nearly half (48%) had to significantly reduce the level of remuneration.
• After the outbreak of the war, almost 40% of startups did not make any attempt to obtain financing for their operations and development. In one third of the cases, companies did try to raise funds, but without success.
• Almost one entrepreneur in three (30%) had to relocate their business, at least partially, outside the country. The majority of the respondents (61%) did not need to change the location of the company’s headquarters after the outbreak of the war. 

How to support Ukrainian startups

The last section of the report is about how Ukrainian startups can be supported. 

First of all, the surveyed startup founders need financial support — in the form of grants (74%) or introductions to investors (61%). They also need to be assisted in customer acquisition (44%) and establishing a presence in new countries through legal support (39%), acceleration (25%) or co-working (19%).

Asked about the skills their teams lacked the most, respondents mentioned competencies in sales (44%), marketing (33%) and fundraising (33%). Some startups are lacking of business relationship building and language skills.

Calling to support Ukrainian startups, Łukasz Wawak, who manages Polish-Ukrainian Startup Bridge, writes: “We encourage you to use Ukrainian entrepreneurs’ products, solutions, and intellectual property around the world. Every euro spent on the Ukrainian products is one small step towards Ukraine’s victory.”

Wawak also drew attention to the risk of “draining Ukraine of its greatest talents.”  Ukrainian IP achievements should be respected, “the society’s struggle for freedom” should be supported through help in reconstruction while ensuring that “as much capital as possible flows back to Ukraine.”