Celebrating a unicorn round with cake in a Kyiv office while missiles target the power grid is more than a feel‑good anecdote; it is a strategic signal. Ukraine’s tech ecosystem is not just surviving the war, it is compounding. For European tech and investors, that has consequences well beyond Ukraine’s borders.
In this piece, we’ll look beyond the human‑interest angle and treat Ukraine’s startups as what they are: a core part of the country’s war economy and a future pillar of the European single market. We’ll unpack what the latest signals from Kyiv and Lviv mean for capital flows, talent competition, defence technology – and why ignoring this ecosystem is now a strategic mistake for European founders and VCs alike.
The news in brief
According to TechCrunch, four years after Russia’s full‑scale invasion, Ukrainian startups are still raising capital, hiring and shipping products from inside the country.
Language‑learning platform Preply reached unicorn status earlier this year and plans to hire about 100 additional engineers across global teams, with around one‑third of its engineering force remaining based in Ukraine. TechCrunch reports that Kyiv’s tech community is adapting to frequent power outages with generators, battery packs and offices functioning as 24/7 heated refuges for staff.
The article also highlights Aspichi, which pivoted after the invasion to focus on Luminify, a mixed‑reality mental‑health platform helping soldiers, veterans and civilians cope with war trauma. Startups can obtain a special status shielding key employees from mobilisation if their work is deemed strategically important.
Beyond Kyiv, Lviv is emerging as a second hub, with venues like LEM Station and events such as IT Arena 2025, which drew more than 6,000 participants from over 40 countries. Local VCs, including 1991, Flyer One Ventures and SMRK, remain active, and Ukrainian delegations continue to show up at European tech conferences despite the travel burden.
Why this matters
Seen from Silicon Valley or Berlin, it’s tempting to file this under “inspiring resilience” and move on. That would be a mistake.
First, Ukraine’s tech sector is becoming a central pillar of the country’s war‑time resilience. High‑value software exports and product revenue bring in foreign currency, pay taxes and keep highly educated citizens economically engaged instead of emigrating. Every unicorn round or profitable SaaS company is, indirectly, an asset on Ukraine’s geopolitical balance sheet.
Second, this ecosystem is increasingly integrated into global product teams. Preply keeping a third of its engineers in Ukraine is not charity; it’s a recognition that the country has one of the densest pools of senior engineering talent in Europe. For European startups struggling to hire, Ukraine is no longer just an outsourcing destination – it is a peer market with its own product companies, from Grammarly and GitLab (both with Ukrainian roots) to newer players in AI, cybersecurity and dev tools.
Third, the state’s decision to exempt strategically important startup employees from mobilisation is quietly redefining what counts as “critical infrastructure”. Defence tech is the obvious category, but Aspichi’s mental‑health platform shows that software for psychological resilience is now understood as part of the war effort. That widens the aperture for dual‑use innovation at the intersection of health, AI and immersive tech.
The losers in this story are any investors or corporates who still treat Ukraine purely as a risk factor. Capital that waits for “stability” may find, five years from now, that the most interesting companies are already spoken for – by the VCs and strategics who were willing to wire money into Kyiv during blackouts.
The bigger picture
Ukraine is not the first country where war has accelerated specific kinds of innovation. Israel’s cybersecurity and defence‑tech strengths are rooted in decades of conflict and conscription. The difference with Ukraine is the timing: this is happening in an era of remote‑first work, cloud infrastructure and global developer tools. A founder in Lviv can now build, ship and sell globally with less friction than many Western European peers had even ten years ago.
The war has also catalysed a broader shift in how Western governments and investors think about “strategic technologies”. Since 2022, NATO and the EU have expanded defence‑innovation programmes, from NATO’s DIANA accelerator network to the European Defence Fund. Ukrainian startups are de facto testbeds for drones, electronic warfare, logistics software and battlefield intelligence tools that are getting feedback cycles measured in weeks, not years. That speed is hard to replicate in peacetime environments.
At the same time, civilian‑oriented startups are internalising constraints – intermittent power, unreliable connectivity, massive internal displacement – that force a kind of extreme‑conditions product thinking. Tools built to work under bombardment tend to be robust, offline‑capable and lightweight. Those same properties are valuable in emerging markets with weak infrastructure, giving Ukrainian companies a natural springboard into parts of Africa, the Middle East or Latin America.
Finally, the persistent presence of Ukrainian delegations at events from Stockholm to Lisbon is a reminder of another trend: the de‑centering of Silicon Valley as the sole gravitational force in tech. Europe’s periphery – Baltics, Balkans, now Ukraine – is growing its own networks of founders, operators and angels. When people in a Kyiv bunker are listing their unicorns with pride, they are not asking for empathy; they are staking their claim in that emerging map.
The European / regional angle
For Europe, Ukraine’s startup resilience is not a distant human‑interest story; it is a preview of the bloc’s future internal market.
If and when Ukraine advances towards EU membership, Brussels will suddenly inherit a tech ecosystem of several hundred thousand engineers, a handful of globally recognised products and a deeply battle‑tested defence‑tech sector. That raises uncomfortable but necessary questions for EU regulation.
GDPR already shapes how products like Luminify must handle extremely sensitive mental‑health data. The Digital Services Act and the upcoming EU AI Act will apply to content‑moderation tools, recommendation engines and military‑adjacent AI systems that Ukrainian teams are building under fire. The tension between strict, process‑heavy regulation and the need for fast, iterative deployment will become very real once Ukraine is inside the single market rather than at its edge.
On the opportunity side, European corporates – in automotive, manufacturing, fintech or health – can tap into Ukrainian innovation far more easily than US or Asian rivals, thanks to geographic proximity, cultural affinity and, eventually, regulatory alignment. We are already seeing early versions of this with German, Polish and Baltic companies partnering with Ukrainian dev shops and product teams.
For European VCs, Ukraine offers something increasingly rare in the EU core: large numbers of experienced engineers still willing to start companies at more modest valuations. The risk profile is higher, but so is the potential for outsized impact. Treating Ukraine merely as a CSR destination rather than as a core part of dealflow would be a strategic error.
Looking ahead
What happens next depends largely on the trajectory of the war, but some patterns are already visible.
In the short term (12–24 months), expect further concentration of talent in a few hubs – Kyiv, Lviv, possibly Dnipro and abroad in Warsaw or Berlin – while fully distributed teams remain the norm. Defence and dual‑use tech will likely continue to attract the lion’s share of Western grant money and strategic investment, but there is room for breakout companies in edtech, healthtech, fintech and B2B SaaS using Ukraine both as a test market and as an R&D base.
Over a five‑year horizon, the real story may be reconstruction. Rebuilding infrastructure, housing, logistics and public services will be one of the largest innovation projects Europe has seen in decades. Startups that today are hacking around power cuts and damaged roads will tomorrow be bidding – directly or via partners – on smart‑grid deployments, digital public‑service layers and climate‑resilient construction solutions.
The main risks are less about capital and more about people. Extended mobilisation, trauma and burnout could hollow out the very talent base that makes Ukrainian tech special. A brain drain towards safer, richer EU capitals is already visible. The policy challenge for both Kyiv and Brussels will be to create conditions where Ukrainians can spend a few years abroad and still see a compelling reason to build long‑term from Kyiv or Lviv.
For outside investors and partners, the key is to move from one‑off symbolic initiatives to durable structures: dedicated Ukraine‑focused funds, long‑term R&D partnerships, multi‑year procurement plans.
The bottom line
Ukraine’s startup scene is no longer an underdog story on the conference circuit; it is becoming one of the most consequential innovation ecosystems on Europe’s horizon. Wartime constraints are producing companies that are leaner, tougher and more globally plugged‑in than many of their Western peers. The question for European founders, investors and policymakers is not whether to “support” Ukrainian tech, but whether they are prepared to treat it as a strategic partner – or watch others claim that role instead.
