Global Markets, Bio & Defense Tech: How Ukrainian Startups are Shaping the Future of the Tech Industry
During the tenth edition of IT Arena, the traditional Startup Competition took place, showcasing Ukraine’s largest and most prestigious startup event, offering cash prizes, investments, and market recognition.Despite the war, blackouts, and shelling across the country, Ukrainian developers continue to create new products, lead teams, and strengthen the country’s defense capabilities. Some are even gearing up to globalize their businesses and showcase their innovations at international exhibitions. IT Arena 2023 brought together over 3,000 attendees, each of whom had the chance to soak in the entrepreneurial and technological spirit. This year, on top of the official prizes, startups even secured investments before the competition wrapped up.
Pitching and finalist selection
Out of the 138 teams that applied this year, 29 startups from the general category and 15 from the defense category advanced to the semi-finals of the Startup Competition. The total prize fund for the competition was $489,000. Additionally, startups secured investments for business development, a rare phenomenon in Ukrainian startup competitions, totaling $310,000 and €100,000.
The semi-finalists’ pitches were held at the Maria Zankovetska Theatre. Over two days, teams presented their ideas to the jury and attendees. Despite being nervous, they effectively communicated the value of their products and answered the jury’s questions. The projects were evaluated by experienced technology and digital leaders, as well as venture fund managers from Silicon Valley, the USA, Finland, and Ukraine:
- Marvin Liao, Partner at Diaspora Ventures
- Mikko-Pekka Hanski, Founder of Ministry of Good Spirit, Chairman of the board at YTK
- Mariia Tintul, Head of Business Development at Startup Wise Guys
- Andriy Fedoriv, Founder and CEO at Fedoriv Agency, General Partner and CEO at Vesna Capital
- Andrew Zinchuk, Managing Partner at ZAS Ventures
- Oleksandr Yatsenko, Principal at SMOK Ventures
Participants of IT Arena Startup Competition 2023 covered various industries: AR/VR, aerospace, EdTech, AI, energy and ecology, healthcare, marketing, retail, and Web3. This year, IT Arena, in partnership with the Defense Technology Development Cluster Brave1, introduced a special category for defense tech startups.
Among them, there were drones for various purposes, demining tools, platforms for handling sensitive data, communication tools for the military, devices for detecting enemy objects, to name a few. For example, the startup Kolossal developed a platform for storing, analyzing, and visualizing OSINT data to assist the Armed Forces of Ukraine. Its creators are known for developing the interactive battle map Deepstatemap. The platform has been under development for almost a year by volunteer developers, including even military personnel who code in their free time.
Ivan Dmytrashevych, CEO of Startup Depot Lviv Business Incubator, conducted interviews with over 20 teams in the defense tech category and confidently states, “Our people are capable of offering an incredible combination of technologies and the best solutions in this field. If such startups receive sufficient funding, we will have a very strong defense sector, and we will quickly approach victory.”
Among the startups in the general category, all teams had viable and relevant ideas and a high level of English, which is extremely important. Ivan noted a good gender balance among the CEOs of startup finalists and winners. He advises future startups, “Move quickly, iteratively, don’t be afraid to make mistakes and learn from them, be helpful, and don’t be afraid to ask for feedback and assistance.”
The first day of the Startup Competition concluded with the selection of seven teams from the general category and three teams from the defense category for the finals. The Startup Competition Finals took place on the second day of the event on the stage of the Lviv Opera House.
Eco-packaging: a shift away from polystyrene
The first place in the general category and the main prize of the Startup Competition – $10,000 – were awarded to the S.Lab team, which offers a complete replacement for polystyrene with eco-packaging made from mushrooms and hemp. Additionally, the team manufactures furniture from these materials. While polystyrene is not recyclable at all, S.Lab’s packaging is an organic product that decomposes in just 30 days. S.Lab received trust and investments from three different funds: $100,000 in investments from ZAS Ventures, $10,000 from angel investor Sasha Reminny, and €100,000 from Vesna Capital.
“I am pleasantly surprised that we received investments right at IT Arena, closed our investment round, and can continue to develop our mission,” shares Julia Bilyatska, co-founder and CEO of S.Lab. Julia considers this victory a team effort. S.Lab plans to use the investments for technology development, business growth, acquiring new clients, and scaling up.
The second place, with a prize fund of $8,000, was awarded to the startup Numo. Their mobile application helps adults with Attention Deficit Hyperactivity Disorder (ADHD) improve their productivity and mood daily. When the founder of the startup, Julia Ovcharenko, was diagnosed with ADHD, she tried many solutions, but none of them made her life easier. Therefore, she decided to create Numo – an app that offers helpful exercises and community support.
Numo is a young startup – only a year on the market. Julia shares, “The experience of performing on the Opera Theatre stage is incredible; I am no longer afraid of smaller stages. Participating in the competition has improved our level of self-presentation and visibility in the Ukrainian ecosystem,” says Julia. Startup Competition helped the team find the necessary resources for the project’s further development. Julia adds, “The equity-free money we won is very important in our circumstances. Our startup focuses on health, so we need to communicate more with specialized funds that approached us after our pitch. This will help us with our next fundraising.”
The third place and a prize of $5,000 were awarded to the startup Jetbeep. The company has created fully autonomous parcel lockers for postal providers, logistics companies, and retailers. Valeriy Chekalkin, co-founder, and CEO of Jetbeep, admits that the victory was unexpected: “We are super excited. We have been approached by many investors and unexpected clients that we didn’t even expect to find in Ukraine.” He suggests that the result was due to their thorough preparation, the startup acceleration they went through, pitch training, and a strong business model.
Radio stations, acoustic sensor network, and direction finders complex
Among the startups in defense tech, the project Himera emerged as the winner – a tactical communication system for defense forces featuring compact radio stations. The team received $10,000.
“Our victory, along with the startups Zvook and Falcons, reflects the support we provide to the military,” comments Mykhailo Rudominskyi, CEO of Himera. He admits that he doesn’t consider his startup significantly better than the competitors: “All defense teams that made it to IT Arena are very, very cool teams, regardless of what place they took.”
Zvook, an acoustic sensor network for detecting airborne objects, secured the second place and received $8,000. Falcons, which developed the “ETER” complex of tactical-level direction finders, took the third place and received a reward of $5,000.
In addition, Zvook and Falcons decided to join efforts to create a more effective and complex target detection system. During the pitch in the finals, the teams announced their collaboration. It is noteworthy that the developers knew each other before, but they finally discussed their common vision and plans for further cooperation at IT Arena.
Defense tech startups Zvook, Falcons, Mantis Analytics, and Griselda received $200,000 in investments from an angel investor with 20 years of experience, who remains anonymous. These investments will help the startups work more effectively towards victory.
Other finalists received non-monetary rewards, such as vouchers for access to cloud services, educational programs for startup teams, pre-acceleration programs, mentoring hours, co-working space access, and more.
Maria Tintul, Head of Business Development at Startup Wise Guys, participated in the Startup Competition as a jury member for the second time. She highlights the growth and diversity of the startup ecosystem, stating, “The quality and depth of the issues that startups are working on are increasing, along with the globalization of businesses. They are exploring how to conquer the world.” Maria recommended that startups maintain a clear structure in their presentations: “In the first 2-3 slides, you should explain why your business exists, how it will continue to exist for another hundred years, the problem you solve, and how.”
Marvin Liao, investor and partner at Diaspora Ventures, also emphasizes on the art of presentation. He states, “The biggest problem for startups is the lack of sales, marketing, and presentation skills. I recommend the book ‘Get Your Startup Story Straight’ by David Riemer to all my portfolio companies and to you as well. Because storytelling is crucial: sales is storytelling, PR is storytelling, fundraising is storytelling.” Overall, Marvin is impressed with this year’s startups, saying, “The technical talent in Ukraine is incredible. There are companies I would like to talk to.”
Andriy Fedoriv, founder and CEO of Fedoriv Agency and a general partner at Vesna Capital, also highly praises the competitors. He says, “Everything was dynamic and professional, on time, and exclusively in English.” However, he recommends building a pitch based on 5 evaluation criteria: idea, market/product, business model, current dynamics, and team – to cover them all. He also emphasized the need to carefully develop the product because some of this year’s startups “tried to address global problems at the local level with minimal budgets or chose a product similar to hundreds already on the market.”
Andriy believes that the gap between the first and second place was small: “Both startups are excellent. The fact that they are so different – the Numo psychological support app and the mushroom-based packaging from S.Lab – only proves that IT Arena managed to bring and showcase the entire spectrum of Ukrainian technologies, from software to hardware.”
Andriy Fedoriv’s Vesna Capital Fund is one of the funds that confirmed investments in the S.Lab startup during the competition. He explains, “We liked the technology, the product, and the founders’ attitude towards it – it’s a part of their lives! Also, S.Lab is in the sustainability segment, which is definitely promising, and our previous investments in this direction have been very successful. We hope this will be a great match as well.”
At IT Arena, the creation of another investment fund was announced – Green Flag Ventures. It will be headed by American entrepreneur Justin Zeefe. The fund is set to invest in pre-seed and Series A startups, with one of its focuses being defense tech. Additionally, the fund is interested in Ukrainian projects
This year’s Startup Competition united startups of varying ages, including young teams, some of which were less than a year old, and more experienced ones. A noteworthy aspect was the gender balance among startup founders, with the first and second place winners in the main category being startups led by female CEOs. The substantial investments that some startups attracted during the competition indicate their potential in the global market and their significant social impact.
Thanks to our partners for their support:
Exclusive Partner: iClub
Silver Partners: Sigma Software, “Polish-Ukrainian Startup Bridge, Cooperation Fund Foundation”, Genesis, Unicoway.