Ukrainian startups are like the hobbits in the famous «The Lord of the Rings» trilogy. Despite facing formidable challenges and the looming threat of Sauron’s dominance in their homeland, these innovative creatures weathered the storm and showcased remarkable resilience in 2022. Moving into 2023, they withstood adversities, garnered global support, and created groundbreaking technological solutions.
The green and clean technologies field has been particularly notable in this context. Startups in this sector have become integral to Ukraine’s sustainability initiatives while contributing to the worldwide effort to combat climate change.
The Greencubator team kept supporting Ukrainian cleantech entrepreneurs through 2022–2023, tracked their progress, and witnessed the evolution of the entire industry. In this article, I’ve highlighted three main insights on how Ukrainian cleantech survived in 2023, during the second year of the full-scale Russian invasion of Ukraine. Spoiler alert: Ukrainian cleantech has done more than endure; they also attracted millions of investments and impressed the world with their innovations. But first things first.
№1. We ran sprints in 2022, while 2023 taught us to focus on marathons
2022 was primarily about «damage control» for all Ukrainians, including the business and startup community. It was a period where many entrepreneurs operated on sheer adrenaline and ran multiple sprints named «survive, keep business alive, support the defense forces, repeat.» The full-scale Russian invasion immediately wiped out all long-term strategic plans for companies. From five-year plans, businesses switched to short-term ones. These strategic plans spanned mere days, gradually extending to a month and then to quarters. The entire year of 2022 turned into a critical test of endurance, solidarity, and resilience, profoundly impacting every Ukrainian and every business.
As 2023 dawned, a new chapter became visible. It proved that Ukraine, its people, and its entire business community had actively adapted to living and working in wartime. Ukrainians have understood that war is not a sprint but a prolonged series of marathons, necessitating a strategic reorientation for businesses. Here’s what Ukrainian startups have done to do so:
- Embracing Distributed Teams. Ukrainian startups have increasingly adopted the model of distributed teams as part of their risk management strategies, leading them to establish operations across multiple regions and countries. For instance, a carbon capture company, Carbominer, has expanded its operations to Ukraine and Poland. Similarly, Releaf Paper, known for producing paper from fallen leaves, maintains a part of its team in Ukraine while also setting up a manufacturing facility in France. Rekava and The Good Plastic Company had to relocate their production facilities to safer western regions of Ukraine.
- Expanding into new markets. Ukrainian startups have swiftly shifted their focus towards the global market. One notable instance is an aviation solutions provider, Inputsoft. The company initially planned to collaborate with Ukraine’s largest airport, Boryspil, and other local clients. However, today, they are engaged in negotiations for partnerships with numerous airports across the globe.
- Tailoring solutions to Ukraine’s local needs. The war in Ukraine has acted as a catalyst for developing diverse technological solutions in the defense, agricultural, and energy sectors. A noteworthy example is a Ukrainian company, Frendt, which has harnessed its precision agriculture technology to create a drone capable of assisting farmers in clearing mines from their fields. Atmosphere, our alum and ClimateLaunchpad Ukraine national finalist 2019, has entirely switched to serving the defense needs of frontline-ready power solutions and creating rugged powerbanks Burevii.
Ukrainian businesses, small and large, have largely adopted the concept of work-war-life balance. In addition to their primary business functions, they actively contribute to the support of the Ukrainian Defence Forces and various humanitarian causes to help civilians.
№2. In 2023, green startups from Ukraine were getting invested. And the checks were increasing.
In 2023, the Ukrainian startup ecosystem kept moving forward, being an increasingly important part of the new Ukrainian economy. And cleantech innovators were among the newsmaker among Ukrainian startups.
According to the Paris Agreement, Ukraine has to reduce greenhouse gas emissions by 35% by 2030 and achieve carbon neutrality by 2060. The EU-Ukraine Association Agreement also mandates the development of Ukraine’s green economy. These factors collectively create a robust demand for innovative green and clean technologies in Ukraine, promising returns for investors. This appeal has captured the attention of leading Ukrainian investors, supported by some well-known international VCs.
While in 2022, investors adopted a wait-and-see approach, 2023 wraps with visible investment success stories. Here are just a few examples:
- Releaf Paper, a paper producer from fallen leaves, has received a €2.5 million grant from the European Commission. Furthermore, the startup intends to raise an additional €8 million in funding, with half of this amount, €4 million, sourced from assured investments provided by the European Union.
- Prengi, a developer of a SaaS solution for corporate property & energy management, has raised $500,000 from Ukraine’s SMRK investment fund.
- Carbominer, a modular Direct Air Capture company, will receive €1.5 million in grant funding from EIC Accelerator.
- S.Lab, a manufacturer of biodegradable packaging made from mushroom mycelium and hemp, has garnered over $320,000 in investments from Techstars, ZAS Ventures, Vesna Capital, and others. Additionally, Startup Wise Guys SaaS Milan has made an undisclosed investment.
- InputSoft, a developer of operational efficiency solutions for the aviation industry, has raised $250,000 from Ukrainian venture capital fund SID Venture Partners, Sigma Software Labs, and Torino Cities of the Future Techstars Accelerator.
- GO TO-U , an electric vehicle charging management platform, has raised $200,000 from Ukraine’s Angel One Fund.
- Meredot – EV Wireless Charging , a developer of wireless charging solutions for electrical transportation, was accepted to Techstars Alabama, raising $100,000.
№3. The war has propelled the development of some unexpected cleantech solutions
The ongoing russian invasion of Ukraine has presented many daunting challenges across many sectors of the economy, including energy, telcos, logistics, water, agri, logistics, and others. Still, we are proud of Ukrainian innovators addressing these challenges with creativity and determination.
During the cold season of 2022-2023, Russians attacked Ukraine’s energy infrastructure with over 1,200 missiles and drones, and around 250 hit the target. 43% of the national grid was damaged, causing widespread power outages nationwide. That has catalyzed the wave of investments into decentralized energy sources, energy storage, and local generation systems, with some businesses deploying their microgrids and becoming energy producers.
The fantastic resilience of the energy systems operators is matched by the new wave of Ukrainian startups and SMEs offering solutions for decentralized energy production and self-reliance. Here are just some of them:
- A major regional EPC contractor, Promavtomatyka, introduced to the market a multichannel fast-charging unit for the military under the brand Bandera Power.
- Burevii, the above-mentioned rugged power bank producer, has also launched a line of large batteries serving frontline hospitals.
- Skat Energy tests virtual power plant technology to connect numerous distributed storage devices with energy exchanges.
Solutions for the agricultural sector, traditionally Ukraine’s business card, have also become important. As mentioned, Frendt has used its precision agriculture technology to create a mine-detecting drone to help clear agricultural land. Pipes.one has introduced a mobile technology for producing large-diameter industrial plastic pipes at construction sites. This innovation will help to restore damaged cities and irrigation systems in Ukraine faster.
These examples are merely a glimpse into the cleantech movement in Ukraine. These green startups are surprising the world with their innovations and serving as an inspiration for our team. At Greencubator, we are proud to support and facilitate the growth of these groundbreaking ventures, contributing to a more resilient and sustainable future for Ukraine.
READ ALSO:
