Ukrainian Venture Capital and Private Equity Overview 2019

Ukrainian Venture Capital and Private Equity Association (UVCA) and Deloitte Ukraine are pleased to present the results of the Annual Market Report – the Ukrainian Venture Capital and Private Equity Overview-2019.

Gold sponsor of the Overview is Innovation DTEK.

During the last years we’ve seen steady growth of the Ukrainian investment market. Although the COVID-19 outbreak has made some adjustments to investor plans and startup development, understanding 2019 trends will be helpful for investment market players in order to manage expectations, sustain (and develop) their businesses in a new reality.

2019 Ukrainian investment market highlights:

For the first time investments in Ukrainian startups and IT companies have reached a half-billion mark in a year. The total volume of venture investments into Ukrainian IT companies has reached $510M, which is one and a half times more than the maximum of 2018.

The number of deals in 2019 was almost the same as in 2018: 111 deals compared to 115 in 2018.

In 2019, the volume of M&A transactions (mergers and acquisitions) increased by 18 times. 15 M&A deals have totaled $460M while in 2018 there were 7 transactions worth $25.2M.

The increase of Angel Investments by 7 times in 2019 has been shown in the amount of $6.1M compared to $0.9M in 2018.

“For the first time, we analyzed gender diversity among startup founders that raised funding. We found out that 26% of companies have at least one woman among founders. Thus, according to Crunchbase, the global average is 19%. I hope that the tendency of gender equality in Ukraine will strengthen further and that women will also prove to be effective crisis managers”

Olga Afanasyeva
CEO at Ukrainian Venture Capital and Private Equity Association (UVCA)

2019 was marked by 29 exits of Ukrainian investors, with the average transaction check growing by 78% to $5.7M. Software companies have been leading in the number of deals and their volume, moving the “online service” sector to second place. The volume of TOP-10 transactions has almost doubled to $456M.

By geography, 90% of the attracted investments were inflow from the USA.

Ukraine is strengthening its positions at the global tech arena every year by increasing the volume of investments attracted around the world and becoming home for unicorns and R&D hub for foreign companies.

“Released annually, our report shows an increase in investments in Ukraine. Despite the 2019 elections, investments are steadily growing in a number of industries, in particular, in software, hardware, and online services sector. Although 2020 brings about dramatic changes, the report shows a considerable potential for investments into Ukraine. As soon as the global economic situation stabilizes, Ukraine will witness the further growth in investments. In a meantime, we all have to work diligently to resolve domestic issues in order to increase Ukraine’s credibility and investment attractiveness.”

Volodymyr Yumashev
Partner and Leader of TMT Industry Group at Deloitte Ukraine

TOP-10 deals in 2019:

Growth:

• GitLab, $268M
• Grammarly, $90M
• People.ai, $60M
• JiJi.ng, $21M

Series A:

• Allset, $5M
• Unstoppable Domains, $4M
• MyCredit, $3M
• AllRight, $1.5M

Seed:

• PromoRepublic, $2.3M
• RetargetApp, $1.5M

Ukrainian Venture Capital and Private Equity Association (UVCA) shapes the future direction of the private equity industry by promoting investment opportunities of Ukraine, representing interests of private equity investors to policymakers and improving investment and business climate of Ukraine. It was established to spread the word about Ukraine’s achievements and opportunities and to support investors in every aspect, from providing reliable information to establishing international connections at the industry and government levels. As a member of Invest Europe, we connect our members with the main players of the global investment market.

Deloitte Ukraine is a member of the global network of Deloitte companies that provide services in audit, consulting, tax, financial advisory, risk advisory and related services. With global revenue of USD 46.2 billion in FY2019, Deloitte is the largest professional services firm in the world. Deloitte operates in more than 150 countries, with over 312,000 professionals.

With a globally connected network of member firms and more than 25 years of operation in Ukraine, Deloitte brings world-class capabilities and high-quality service to clients, delivering the insights they need to address their most complex business challenges and offering comprehensive, integrated solutions for businesses operating in power, natural resources, mining sectors, life sciences and health care, technology, media and telecommunications, consumer, financial, public, and social sectors.

DTEK is the largest private investor in Ukraine’s energy sector. DTEK Group produces coal and natural gas, generates electricity at thermal, solar and wind power plants. The company also distributes electricity, supplies electricity to end consumers, provides energy efficient solutions and develops a network of EV charging stations across Ukraine. Rapid development of new technologies, alternative energy markets, energy efficiency and energy-saving technologies as well as decarbonization has driven the world towards a global transformation. DTEK has met the global market challenges with an Innovation DTEK stream and embedded it as its core driving force.