Ukraine has produced notable founders like Vlad Yatsenk (Revolut), Jan Koum (WhatsApp), and Alex Shevchenko, Max Lytvyn, and Dmytro Lider (Grammarly). But today the country’s $6.8B tech sector is experiencing a brain drain due to the Russian invasion.
In response, two entrepreneurs have launched a Rolling Fund to support founders who fled Ukraine and are now rebuilding their lives—and companies—in new countries.
Their investment thesis: Ukrainians don't give up easily.
“Ukrainian pilots have a saying: ‘the plane takes off despite wind resistance,’” said entrepreneur Sergii Kremeno, a native Ukrainian who spoke to us from the basement of his home in war-torn Kyiv. “It means even if things are difficult, we don’t give up. You’ve seen this with the war, but it also applies to Ukrainian entrepreneurs. We believe the enormous pressure Ukrainians are facing today will lead to great progress.”
Kremeno is a two-time founder and co-GP of the Rolling Fund, dubbed Ukrainian Tech Ventures, alongside Roman Tyan, founder of NRG Ventures. Ukrainian Tech Ventures is designed to provide founders forced to flee Ukraine with funding and mentorship.
Kremeno and Tyan hope to cut $50k-$200k checks to around 200 early-stage startups founded by Ukrainian expats over the next four years.
Notably, they don’t plan to charge carry to investors (both Kremeno and Tyan are each individually providing 1% of the fund’s committed capital as their GP commit).
“This is about doing the right thing and maximizing the benefit to both founders and investors,” said Tyan. “Donations and humanitarian aid are important today, but the investments Ukrainian Tech Ventures makes will impact all Ukrainians in the future.”
Kremeno and Tyan recently chatted with AngelList about their inspiration for Ukrainian Tech Ventures, the war’s impact on Ukrainian startups, and why they think Ukrainian founders are a good bet.
Matthew Speiser: How has the war impacted Ukraine’s startup ecosystem?
Roman: It’s made it so that many people cannot work right now, either because it’s unsafe, or they’ve joined the army, or they’ve had to relocate to a place where they don’t have access to their job. That’s obviously been an enormous drag on the industry. But perhaps worse is that virtually all domestic financial support to the 1.4k startups operating in Ukraine has stopped, leaving these businesses with very few options to continue operating.
MS: How is Ukrainian Tech Ventures going to help these startups?
Sergii: We can help them get a fresh start. Fortunately, Europe and the United States have decided to open their doors to Ukrainians. But the problem for Ukrainian founders is that they don’t understand how the European or U.S. fundraising markets work. There’s a different culture and mentality than what they’re used to in Ukraine. Roman and I, having successfully launched Eastern European businesses in global markets, can be a bridge for these founders.
MS: What do you mean by ‘be a bridge’ for founders?
Kremeno: We mean be a service beyond capital. We mentor founders based on our own experiences, provide them with services to help them relocate the business, teach them how to integrate into the business culture of their adopted country, and show them how to raise more capital. This is important because in Ukraine, most capital is raised from friends and family and angel investors—who often take a huge percentage share of the startup. We teach founders the western way of doing things, and introduce them to people so they have a network to lean on.
MS: How will Ukrainian Tech Ventures get access to great deals?
Kremeno: I’ve founded multiple startups and Roman’s been in Eastern European VC for over 15 years. This experience makes us very well-networked in a part of the world most investors don’t have visibility into. I’ve stayed in Kyiv during this conflict, so I remain close to my network. We also communicate with partners in neighboring countries, so we have insight into where companies are going and how we can help.
MS: Why might Ukrainian founders be a good bet for investors?
Tyan: Succeeding as a founder is all about not giving up, and I think the world has seen the resilience of the Ukrainian people these last few months. You’re not going to find a more motivated group of entrepreneurs than Ukrainian immigrants who’ve been given a fresh start in a new country. That’s why you see Ukrainians founding some of the most successful startups around the world, such as Grammarly, Revolut, and WhatsApp.
I think this gets at a more subtle point, which is that Ukrainian founders see both sides of the world. That is, the developing world, which includes parts of Eastern Europe, and the developed world. They build products that can fit perfectly into both these words.
MS: Why does a Rolling Fund make sense for Ukrainian Tech Ventures?
Tyan: By having an evergreen fund, we can be a continuous source of support for Ukrainian founders as they adapt and grow their businesses. A Rolling Fund also allows us to market our fund and attract more investors who want to help Ukrainian entrepreneurs during this difficult time. This is the same reason we’re not charging carry. The ultimate goal is sustainable success for Ukrainian founders and their investors.
MS: How does the world change if Ukrainian Tech Ventures is successful? How does the country of Ukraine benefit?
Kremeno: I think there’s a comparison to what Israel’s technology sector has been able to accomplish. Israel is a small country that hasn’t had it easy, and there’s a lack of complacency or comfort. They’re super motivated. I think Ukrainians are the same way. We treat every new challenge as an opportunity.
For the world that means more innovation and economic growth. For Ukraine, it means greater prosperity because Ukrainian founders will bring jobs and opportunity back home. They want to leave Ukraine better than they found it. More broadly, it’s good for Ukrainian integration into the western world. Perhaps one day in the not too distant future, Ukraine could be a place where founders come to build their companies.
To learn more about Ukrainian Tech Ventures and invest, click here.