The fund will make pre-seed up to series A investments, also providing firms with strategic support and access to international networks to attract further investment.
Ukraine Phoenix Tech Fund, a €50m fund supporting startups in Ukraine’s technology sector has been launched with backing from investors including the European Investment Bank (EIB), Bpifrance and Proparco.
The EIB approved a potential €15m commitment in September, adding to a previously committed €10m from the French public investment bank Bpifrance and another €5m proposed commitment from Proparco, the private sector arm of Agence française de développement. Henri Seydoux, founder of drone company Parrot, has also committed €2.5m through his Horizon sas investment vehicle.
The EIB said its share of the funding is expected to be made through the EU for Ukraine Fund, which is dedicated to supporting Ukraine’s recovery from the effects of Russia’s invasion of the country.
The official fund launch took place on 27 September in Lviv, Ukraine, attended by representatives of the investors and Ukrainian government officials.
Mykhailo Fedorov, Ukraine’s first deputy prime minister and minister of digital transformation, said the involvement of the European Investment Bank and private investors reflects growing confidence in the country’s ability to innovate.
“Even during the full-scale war, Ukrainian startups are creating innovative products and competing globally. The launch of UPTF is a strong signal of Ukraine’s potential in the global market,” he said.
Bpifrance CEO Nicolas Dufourcq said the investment demonstrates the importance of European cooperation to support Ukraine, while Françoise Lombard, Proparco’s CEO said the fund will help support Ukraine’s private sector resilience.
“By empowering early-stage companies, we are investing in both Ukraine’s recovery and its long-term growth,” Lombard said.
Market integration
UPTF said it is the first institutionally supported venture capital fund focused exclusively on Ukrainian tech startups. The fund plans to target pre-seed through to Series A opportunities, and would partner with founders in “responsible, high-impact investments that align growth with social, economic, and environmental priorities”.
Besides investing, the fund will provide strategic support and access to international networks that it hopes will accelerate innovation, attract follow-on global capital and help Ukraine integrate with European and wider international markets.
The fund is collaborating with locally based incubator and accelerator eō Business Incubators to identify suitable investments. The incubator works with international mentors and investors and has helped launch over 135 startups.
The fund is led by founders and managing partners Dominique Piotet and Charles Whitehead. Piotet is a Barcelona-based entrepreneur and digital strategy consultant who was previously head of UNIT City, an innovation park in Kyiv from where UPTF will operate.
Whitehead is a New York-based corporate law expert, who has worked for several global investment banks and major academic institutions. He described the fund as “an engine to build a durable economy, an emerging capital market, and a bridge from Ukraine’s extraordinary engineering talent to global customers, partners, and markets”. He said this would be achieved by applying “transparent, international standards”.
European multilateral and development institutions have played a leading role in underpinning Ukraine’s private sector resilience across all industries during the war.
In July, Swedfund and British Investment International joined the European Bank for Development and Reconstruction (EBRD) in a financing package to support MHP SE, a Ukrainian agribusiness products producer.
Recent multilateral support for other Ukraine-focused fund managers has included investment from the EBRD and International Finance Corporation for a new €50m fund announced in July by early-stage VC fund Flyer One Ventures, which invests in Ukraine, as well as other eastern European countries.
The EIB said it has stepped up its financial support for resilience and modernisation in Ukraine, providing €4bn in financing since Russia’s full-scale invasion of the country in 2022.
