More than 90% of mature Ukrainian startups have relocated their headquarters outside the country, the highest rate among Central and Eastern European countries, according to Forbes. Experts note that early-stage investments have always been high-risk, and the impact of the war complicates the situation even further. Often, teams choose to conceal their Ukrainian origins to avoid deterring potential clients and investors.
This is reported by Finway
Previously, startups opened offices abroad only after they began to turn a profit. However, this practice has now become the norm at the company formation stage. Nick Havryliak, founder of the Ukrainian AI startup Assisterr, emphasized that Ukrainian origins are often perceived as a signal for many funds that are ready to offer the lowest valuation.
“Last year, investments in Ukrainian startups amounted to $462 million, nearly 50% less than in the pre-war year of 2021 (over $800 million),” noted Havryliak.
Before the full-scale invasion, the main reasons for Ukrainian startups relocating abroad were the transparency of funding mechanisms, investment protection, and tax incentives. Currently, the most common operational model involves management or the headquarters being located abroad, while the majority of employees continue to work in Ukraine.