Number of investment deals in Ukraine almost doubles in 2024– UVCA
The number of investment deals on the Ukrainian market in 2024 increased to 174 compared to 91 a year earlier, the Ukrainian Venture Capital and Private Equity Association (UVCA) reports in its review "A Ten-Year Retrospective on the Ukrainian Investment Landscape."
"The further recovery of the investment market. The "deal of the decade" with a total investment volume of over $1 billion was closed (Lifecell + DATA group + Volia). Deals in the defense technology sector play a key role in venture deals," the key events of the past year are stated.
According to UVCA, in 2023-2024 the investment market of Ukraine entered the stage of adaptation and recovery: the number of deals is growing, but the average deal size is smaller.
According to the association, the volume of deals in 2024 did not grow as significantly as their number, from $1.7 billion to more than $1.8 billion.
The best, peak year for the Ukrainian investment market, according to the review, remains the pre-war year 2021 - 216 deals worth $2.7 billion, including large deals in IT, energy and agriculture. In total, over 1,400 deals were concluded for a total of $8.8-9.2 billion during the period 2014-2024, the review says.
"Despite the challenges, Ukraine's investment ecosystem remains resilient. We continue to see adaptability among startups, an even greater focus on innovation, and growing interest from international investors, especially in high-potential sectors such as renewable energy, defense technologies, and artificial intelligence. Of course, access to capital remains a key challenge and restoring investor confidence is something we must all work on together," said John Patton, founding partner of Argentem Creek Partners, head of the EMEA&Asia region. The company declares that over the years of operation in Ukraine it has invested more than $600 million in logistics, agriculture, metallurgy, and mining.
It is noted that during the decade under review, Ukraine’s investment ecosystem lacked institutional lead partners (LPs) – two compared to an average of five for Central and Eastern European (CEE) countries – and saw limited interest from regional and global funds, leading to underinvestment in Ukraine. As a result, the country has significantly fewer active fund managers relative to GDP compared to regional figures, mainly due to a lack of available institutional capital for local private equity (PE) players and a limited presence of regional and global funds.
At the same time, after the start of full-scale Russian aggression, many local teams remained active and are now attracting Ukraine-focused private equity funds. Ukrainian PE funds follow diversified strategies across multiple sectors, covering not only technology but also agriculture and food processing, infrastructure, green energy, manufacturing, and other sectors critical to Ukraine’s reconstruction and economic development, the review says.
According to it, last year the share of domestic deals (both buyer and seller from Ukraine) increased to 53.1% from 51% a year earlier, deals with a Ukrainian buyer and a foreign seller increased to 20.4% from 12.8%, while the share of deals with a foreign buyer and a Ukrainian seller fell to 26.5% from 36.2%.
Overall, during the war period, the share of domestic investment (by number of deals) increased to 55% from 40% in 2014-2021, while investment from both the US and the EU decreased to 17% from 22%, and from other countries to 11% from 16%.
Regarding the sectoral distribution, it is reported that after the full-scale Russian invasion in 2022, there was a sharp increase in investment in defense technologies (drones, communication systems, cybersecurity, software for command and control of troops, etc.), and increased attention was also recorded to energy security - an increase in investment in renewable energy sources, energy storage systems and gas production.
In addition, interest in the agricultural sector remained stable, which continued to attract investment, but with an emphasis on logistics, processing and exports, while activity decreased in other sectors: investments in real estate, retail and other non-critical sectors fell. As an example, UVCA cites deals with Swarmer, BAVOVNA, Himera Radios, Buntar Aerospace (all MilTech), DTEK projects, OKKO Group projects in wind energy, Dragon Capital investments in peak gas and battery energy storage systems.
The association adds that the exact figures for investments in MilTech are difficult to estimate due to the non-public nature of many deals, but some estimates put them at over $200 million in 2022-2024.
"Despite the war, the IT sector has retained its attractiveness and served as a haven for some investments. Examples include deals with Grammarly, Creatio, Allset, and acquisitions of Ukrainian IT companies by foreign companies (e.g., Intellias Digitally Inspired acquisition)," the review also says.
According to it, the share of deals (by amount) in IT and telecom in 2022-2024 decreased to 35% from 46% in 2021, in agribusiness – to 12.5% from 17.6%, while in energy it increased to 17.6% from 7.5%, in MilTech – from 0.5% to 8%, and in construction and real estate it remained at 12.5%, as in other sectors.
UVCA is a non-profit organization with headquarters in Kyiv (Ukraine) and offices in the EU (Warsaw, Brussels) and the USA (Washington). It was founded in 2014 with seven members, and currently the number of its members exceeds 50. The UVCA supervisory board is chaired by AVentures Capital Managing Partner Andriy Kolodiuk, and the CEO is Dmytro Kuzmenko.