The Ukrainian government unveiled a new fund to provide additional finance for startups in the country in a bid to develop its high-tech sector.
The Ukrainian Startup Fund (USF) has begun the process of accepting application for funding. The fund aims to provide financial assistance to startups in the early stages of development. Startups in the pre-seed stages can receive grants starting from $25,000 to $75,000, which will be provided in several tranches to companies in the following areas:
- Artificial intelligence (AI) & augmented reality (AR)
- Big Data
- Medical industry and healthcare
- Financial technology
- Educational technology
- Professional services
- Software as a service
- The internet of things
Gambling and military technology have been excluded.
By the end of the year, the fund plans to have allocated the first share of $1.6 million to business projects that will be select, with an additional $2.5 million per quarter starting from the beginning of next year, with the intention of $11.7 million being allocated by the end of 2020.
Ukrainian Prime Minster Oleksiy Honcharuk gave a briefing regarding the launch of the Ukrainian Startup Fund. “As part of the work of the Ukrainian Startup Fund, starting today the accepting applications for financing Ukrainian business projects at the initial stages of their development has been launched, namely the pre-seed and seed funding,” he said. “By the end of this year, we will give out the first share of UAH 40 million ($1.6 million) to business projects that will be selected. The next year the funding will be UAH 60 million ($2.5 million) per quarter, that is UAH 240 million in total for 2020”.
It should also be noted that as the funding will be in the form of grants, the USF will not take any equity stake. The selection process will be very competitive and companies will be judged and selected by a panel of 41 experts in the investment venture capital industry.
“The Government will not directly interfere with business. Instead, our victory will be that by supporting startups and encouraging Ukrainians to engage in entrepreneurship, we will enhance the Ukrainian economy development and create more jobs. These aspects are the factors for the overall well-being of our people,” said Honcharuk.
The criteria that the USF are looking for are:
- Ukraine-based company (they only fund Ukrainian businesses).
- Commercially oriented company.
- Startups in pre-seed or early-seed stage.
- Innovative high-tech product or service at the heart of the business.
- Global orientation (or aspirations to go global).
- Leadership team in place to drive the business.
- Target sectors outlined earlier in the article.
- Commitment to fulfill all requirements of the USF.
The USF is a state-owned fund launched by The Initiative of the Cabinet of Ministers of Ukraine.