In conversation with Roman Nikitov, Co-Head of Venture Capital and Tech Investments at ICU Ventures, a Kyiv-based venture capital fund that invests in technology companies with strong ties to Ukraine and Eastern Europe. ICU Ventures is part of the ICU group, one of the largest and most diversified asset managers in the CEE region and the winner of such and such award from international investor.
Ukraine’s booming technology industry is already an important driver of economic growth in the country and wider Eastern European region. The industry is expected to continue to grow and projected to generate 10 billion USD by 2025, according to Tech Ukraine. Roman Nikitov discusses the investment opportunity in Ukraine’s fast growing technology sector, how ICU Ventures helps ambitious local entrepreneurs build global businesses, and the role Ukraine’s technology companies can play in continuing to help the country develop and sharpen its competitive edge.
Why did you launch ICU Ventures?
We launched our venture capital arm in 2018 with a clear strategy to invest in promising tech startups. We often invest in companies with Ukrainian roots but not limited to those. We tend to invest in companies during the late seed or Series A stage. ICU Ventures has already invested between $200,000 and $1 million in 12 startups. In addition to committing investments, the ICU Ventures team also works with the startups on their strategy to help them through their next rounds of fundraising.
Why do you believe there is a strong venture capital opportunity specifically in Ukraine and Central and Eastern Europe?
We strongly believe in the intellectual potential of Ukraine and Central and Eastern Europe (CEE), that is a key factor in our strategy to invest the region. In particular, we think Ukrainian and CEE technology companies can be globally competitive and that technology companies will account for an increasing amount of global GDP moving forward.
We prefer to invest in technology companies with Ukrainian or CEE DNA. This means that the founders are often from the CEE region or the engineering and software development is done in the region. Startups with Ukrainian roots or powered by local developers continue to amaze us with their creativity and business acumen. Ultimately, we try to keep our portfolio 75% focused on companies that have ties to CEE, while the remaining 25% we keep open for companies from different regions that we believe are particularly interesting.
Why is there such a compelling opportunity in the technology sector?
We think the technology sector is one of the most promising areas in terms of Ukraine expanding into the global market. There is an exciting new generation of talented Ukrainian engineers with a quality educational background and creative ideas. We strongly believe in their potential and committed to helping our developers to expand globally. The success of our technology companies is the best promotion for Ukraine as one of the world's leading technology powerhouses globally.
What does your investment in companies involve?
We pride ourselves on investing more than just capital in a company. For instance, we provide our founders with strategic support and a network of contacts in the United States and Europe to expand their companies internationally and stimulate growth. Even if we source opportunities from other geographies, we will help our portfolio companies link up with talented Ukrainian engineers. The access we offer to high-quality, low-cost Ukrainian engineering talent is the key reason established venture capital and technology firms in the United States invite are interested in speaking with us. Aside from making investments, ICU Ventures helps startups with strategy consulting and the next rounds of the fund raising.
What are your future plans for ICU Ventures?
We plan to continue developing our venture capital business and invest in startup companies. The Ukrainian venture capital market has grown significantly in the last few years and we expect that to continue this year and beyond. We are looking for founders and entrepreneurs who are highly ambitious. We will only invest in founders who want to build companies that will compete on the global scale and disrupt industries. We are also looking for products that solve real problems while remaining easy to use.
Please can you highlight some of your current portfolio companies in the CEE region?
3D Look is a Ukrainian startup developer of the technology, that enables creation of a person’s 3D model based on a photo. Company’s products combine the developments from many different fields. Computer Vision, Machine Learning and 3D Matching technologies are to process and measure the human body from just two photos from any mobile device with high accuracy.
Apostera is a software products developer for the car industry, combining most sophisticated modern techniques. Apostera platform enables active safety applications such as lane keeping and departure warning, forward/side/rear collision avoidance, path planning, takes into account all the potential roads’ deficiencies with all its hummocks, holes and pits, up and down slopes, curves and turns.
Respeecheris a Ukrainian startup, which specializes in creating a digital model of human voices. Their product allows modification of voices and can even reduce accent. It opens up a number of new opportunities for studios that make films, animations, and video games.
Hivecell is a New York-based Edge-as-a-Service company powered by a Ukrainian developer team that is redefining the category of edge computing. In contrast to cloud computing, edge technology allows faster and more reliable on-location high-volume computing power for businesses with multiple locations.
Augmented Pixelsis a company that develops products in the fields of navigation, digital mapping and virtual/augmented reality. The company’s product enables autonomous navigation for robots in GPS-denied environments as well as having features that allow to create 3D maps for navigating in unknown spaces through a smartphone or virtual/augmented reality devices (indoor navigation).