Report: Ukraine’s venture market resumes growth; local startups targeted by global tech giants

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– After a short-lived decline in 2014, the Ukrainian IT sector demonstrated record growth in 2015. Not only did the market regain its strength, it significantly exceeded the activity level of any previous year, according to UADN’s report.

– The investment market reached an unprecedented $132 million in total volume in 2015, demonstrating a 240% growth from the year before, when the market shortened by over 55%.

– The growth of investment volume in 2015 was mainly the result of three large-growth stage deals, while early-stage investments slightly decreased.

– Startups oriented to the local market are likely to continue facing difficulties connected with the contraction of the Ukrainian economy and its currency fluctuations. However, there are also a number of winners that profit from such market conditions, including leading e-commerce players.

– Globally-oriented startups attracted more investments in 2015. Many of the teams have moved to their primary product markets, raised follow-on funding from international sources, and kept their R&D teams in Ukraine.

– Foreign investors kept interest in the Ukrainian tech sector, making or leading more than 40% of the deals in 2015.

– In 2015, Ukraine saw the trend of well-known foreign companies acquiring domestic startups, offering global products, continue. The year’s largest acquisition was that of the Looksery image-processing app by Snapchat for a reported $150 million.

– Growth-stage deals emerged as a new transaction class, accounting for $100 million of the total investment volume. Among notable new growth-stage investors was George Soros, who promised to commit $1 billion to Ukraine, with the tech sector figuring on his priority investment list.

– The 2014-2015 period was marked by a government push for reforms. The IT sector played a major role in the design and implementation of some of the most widely recognized and successful reforms, including those addressing deregulation and e-government.

http://www.uadn.net/2016/06/29/report-ukraines-venture-market-resumes-growth-local-startups-targeted-by-global-tech-giants/

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