Unit.City is an innovative tech hub located in Kyiv, Ukraine, symbolizing resilience and entrepreneurial spirit amidst challenging times. This modern facility serves as the backdrop for many emerging startups, fueling the region’s potential for technological growth and development. (UNIT.City / Facebook)
In the shadow of an ongoing war, most investors have approached Ukraine with caution. However, Charles Whitehead and Dominique Piotet have chosen a different path. Fueled by their commitment to fostering local talent, they recently inaugurated the Ukraine Phoenix Tech Fund (UPTF). This €50 million venture capital fund is set to play a pivotal role in placing Ukrainian startups on the global map, even as the country navigates turbulent times.
Inaugurated on September 29, the UPTF stands out as the first venture capital fund to focus exclusively on Ukrainian tech, a project that has been in the works since 2019. Many traditional investors have stepped back due to the escalating conflict, leaving a vacuum that Piotet and Whitehead are determined to fill. The European Investment Bank (EIB) has committed €15 million to the fund, making it the first VC fund backed by Europe’s reconstruction initiative for Ukraine, known as EU4U.
“There is this valley of death in Ukraine, where there is no access to capital,” Piotet remarked in a recent interview. “We will help fill that gap and attract other investors who will see us investing and see the opportunity.” The UPTF aims to bolster 50 Ukrainian tech startups, from early-stage to Series A, with a minimum investment of €100,000, helping them not just to survive but thrive.
What sets UPTF apart is its inclusivity; it is open to all Ukraine-based tech startups across various sectors, excluding defense tech for the moment. This decision reflects the original focus for the fund, which predates the current conflict. With ambitions to help scale companies globally, Whitehead and Piotet are particularly focused on retaining talent within Ukraine—supporting women entrepreneurs, veterans, and displaced individuals.
Whitehead emphasizes that several major institutional investors remain in limbo regarding Ukraine. However, he believes that UPTF could catalyze a more robust interest in the region. “Other investors are watching us. If we build this ecosystem, they might invest more heavily in Ukraine,” he stated.
During their discussions with the Kyiv Independent, the question arose of why they chose this moment to launch the fund amidst ongoing hostilities. Whitehead explained that the groundwork for this initiative began in 2019 and that Ukraine has long produced a significant number of tech graduates. “There was a capital desert, and incredible teams couldn’t get funding,” he explained. Today, however, the global perception of Ukraine includes its economic potential alongside humanitarian concerns.
As they move forward, Piotet believes it’s vital for the fund to create strong connections between Ukraine and Europe. The support from the European government and various investment banks contributes to this bridge-building initiative. He remarked, “Unlike the U.S., Europe completely missed Ukraine in terms of tech; it was a place where some European firms did outsourcing, but nothing more.”
The duo’s vision for UPTF reflects a compelling narrative. Whitehead drew parallels to Silicon Valley’s inception, highlighting that Kyiv possesses essential elements for growth akin to those of the U.S. tech ecosystem. “The innovation economy has always been alive and expanding in Ukraine,” he stated confidently. “I have no doubt it will become a stronger force for our economy.”
What also differentiates UPTF is its commitment to hands-on support for the startups it chooses to invest in. Unlike many traditional VC approaches, UPTF is dedicated to building a comprehensive ecosystem instead of merely providing capital. Piotet confirmed, “We don’t just invest; we actively help integrate our startups into international markets.”
Whitehead elaborated on this hands-on approach, mentioning their extensive network in Europe. “If a startup wants to enter the German market, we have connections there. Similarly, Dominique has a wealth of contacts in Paris, and they are eager to help,” he noted.
The effectiveness of Ukrainian founders has further buttressed their confidence. Whitehead expressed admiration for how founders have transformed constraints into advantages; they’ve developed a keen understanding of navigating uncertainties while innovating amid adversity. This fortitude is precisely what attracts UPTF to contributing to Ukraine’s future.
As global investors look cautiously toward Ukraine, Whitehead’s message is clear: “Don’t be cautious. If you come to Ukraine, you will see the vibrancy of the startup world. This is a world with a rising tide that promises economic returns now and in the post-war period.” He urges potential investors to engage before the opportunity slips away, reinforcing that the time to act is now, as the wave of innovation is already on the rise.
In essence, the Ukraine Phoenix Tech Fund symbolizes a critical turning point for Ukraine’s tech ecosystem, championing resilience and ambition at a time when many others would pause. Through strategic investments and robust support, Whitehead and Piotet are carving a path for Ukraine’s startups to emerge and shine on the international stage.