US investors raise $30 million to assist Ukraine-based startups amid Russian invasion

Amid Russia-Ukraine war, a $30 million fund has been formed by US' New York-based company FF Venture Capital to assist startups with Ukrainian roots. According to Kyiv Independent report, Blue & Yellow Heritage fund is considered to be first Western venture capital fund that is solely dedicated to Ukrainian startup industry. fund would invest in 15-20 early-stage firms formed by Ukrainian entrepreneurs or hiring Ukrainian refugees over course of next five to ten years. FF Venture Capital hopes to raise an ditional $20 million for that, bringing total amount of assistance to $50 million. 

According to Kyiv Independent report, this is a significant assistance for Ukraine's IT industry, which has been severely impacted by both conflict and current financial crisis. Over 90% of Ukrainian startups reportedly need financial assistance to continue ir operations. 

Denys Gurak, fund's Ukrainian venture partner, told Kyiv Independent, “When war broke out we wanted to figure out how we could make most difference in Ukraine and step in to fill sudden drop of liquidity in country.”

Ukraine's startups can access grants from American tech companies

A large portion of money for Ukrainian entrepreneurs is being me accessible in form of grants from American tech behemoths like Google and Amazon, as well as from Ukraine's state-backed startup fund, which offers grants to companies developing military technology. 

Notably, for-profit fund FF Venture Capital, sometimes known as ffVC, emphasises that it is not a charitable organisation. In exchange for shares, it offers investment with expectation of profit. ffVC's founding partner, John Frankel, said, “It is not a charity. It's our way of contributing but also getting what we think will be a high return on capital," Pitchbook reported.  

Partner at ffVC Mariusz amski mentioned that company intends to invest in 20 startups, including those that have shifted and companies that employ Ukrainian refugees, with amounts ranging from $500,000 to as much as $2.5 million. According to amski, "We are looking for businesses that alrey have product 95% developed, and are looking for a catalyst in order to sell product". 

As per PitchBook statistics, startups with ir hequarters in Ukraine have only secured a small amount of venture capital financing, receiving more than $55 million across at least 60 deals since 2020. 

Furrmore, as per Kyiv Independent report, investors are confident that startups would quickly resolve issue despite fact that many Ukrainian entrepreneurs sustained losses as a result of conflict and h to change ir business plans.  

(Image: AP)