There is nothing great about war, and we in Ukraine certainly did not choose our homeland to become the largest battlefield in the world since WWII. However, if this is the case, it’s worthwhile to use this experience for good—for our benefit and the benefit of the entire free world.
At Defence Builder Accelerator, we believe that Ukraine has the potential to become the global leader in Defenсe Tech. There are several reasons to support this belief, though a few key elements are still needed to make it a reality. In this article, we will try to sort it out.
Why Ukraine has the potential to become #1 in the global defence tech
The first reason is quite evident—we are war practitioners, not theorists. Right now, it’s already obvious that the real war is quite different from how strategists, both in the West and in the East, have painted it. For instance, the task that was solved before by a missile for hundreds of thousands of dollars can now be solved by a UAV for tens of thousands.
Situational awareness and the speed of information exchange are incredibly critical in modern warfare. Participating in the largest modern war for the third year already gives Ukrainians an unfair advantage in defence tech development. We have a very fast feedback loop. In just a few weeks, we can receive feedback from the battlefield about any new invention (sometimes feedback can take hours instead of months, as the industry got used to). In countries that are not at war, the full circle of tests can take years to complete and still may not replicate actual field conditions.
Thanks to constant real-world application and quick feedback, we have a clear understanding of what’s needed to conduct modern warfare. And we are highly objective in deciding what works and what’s not because our survival is at stake. This high-stakes environment is incredibly motivating, giving us the strongest possible drive.
What’s also unique about this war is that many innovations are born directly within combat units, not in the military offices or facilities. This is a new and distinctive phenomenon. Sometimes, the most effective solutions are gadgets assembled from makeshift materials in a week.
Previously, technologies entered the Ukrainian army from the top down. The idea was tried at a testing ground, the results were shown to the General Staff, and if they liked the result (or for some other reasons), they gave the order to buy it for the army.
Now, it's exactly the opposite. If somebody comes to the generals with new software, they say: “Until we get confirmation from at least ten different units that they are already using it and need it, we won't even talk to you.” Having a dozen such requests from the battlefield, you go back upstairs and get the contract. This mechanic, which has changed from top-down to bottom-up, works perfectly.
For example, the 24th Brigade of Armed Forces makes cool FPVs that it developed itself. After proving its technology on the battlefield, it approached investors for money to produce 500 ‘birds.’ And they were told: if that works that great, make it 5000 a month, incorporate it as a company, and supply to other brigades as well with the blessing of the General Staff. And that’s already the case.
Thus, we know better than anyone what technological solutions are needed for modern warfare. Our rapid feedback loop allows us to test and iterate any invention quickly in real conditions, giving us an unfair advantage in developing and refining modern warfare technologies. The question is, how can we leverage this advantage?
The magic formula: three pillars of defence tech prodigy
Any investor will tell you that the team is the most critical factor in any early-stage startup. This holds even more weight in defence tech, and there's a perfect formula that will enable Ukrainian defence tech startups to maximize their unfair advantage. This formula has three components.
The first component is, of course, the Ukrainian military, who know what problem of modern warfare needs to be solved and can provide quick feedback. Almost no one in the world can match the knowledge of our soldiers today.
The second factor is engineers who know how to solve problems formulated by the military. Once again, the Ukrainian engineering school has proven itself to be one of the world’s best. In 2023, the number of IT specialists in Ukraine increased by 6%, reaching 307,600 professionals, according to the IT Research Ukraine 2023 study. Every year, over 20,000 tech specialists graduate from Ukrainian universities and colleges.
The third component is proper management, a business approach to solving military problems. Ukrainian defence tech projects have been lacking this, but the situation is rapidly improving, thanks in part to the government's Brave1 initiative and private initiatives like the Defence Builder Accelerator launched in April 2024 by Sigma Software, Kyiv School of Economics, and Buntar Aerospace. This program is aimed at helping Ukrainian defence startups grow and build investment-attractive ventures and make a real impact on the battlefield.
Led by the Ministry of Defence, Ukraine is currently accelerating the development of technological innovations for the battlefield. The Defence Builder Accelerator also takes its role in the field. The Ministry of Defence signed a cooperation agreement with the Defence Builder Accelerator to jointly support developers in creating technological solutions at the request of the Defence Forces and delivering them to the front line as quickly as possible. Acceleration will help them tailor technologies to meet the needs of the armed forces. Upon graduation from the program, developers will gain access to a network of investors, facilitating further advancement and deployment of their technologies.
To create such superteams with all three components, having three diverse co-founders is unnecessary (although this is an ideal scenario). For example, in our defense tech project, Buntar Aerospace, I’m combining two roles: a military man (having served in the Armed Forces for over two years) and a businessman (with considerable entrepreneurial experience). The ideal team can also be assembled by joining forces with other projects or enlisting accelerators’ help.
The main thing is not to start developing theoretical projects in a vacuum without the military’s involvement. The military is our Philosopher's Stone and our main competitive advantage over the rest of the world because they have ongoing experience of real war—the largest war of our time. In combination with engineering talent and proper management, I believe we will create the best defense tech solutions in the world.
What's holding us back
So, we have experienced military personnel, powerful engineers, and many talented managers and entrepreneurs ready to join defence tech projects. Is this enough for UA defence tech to rise? Not yet. We're still missing two important elements.
First, all high-quality developments require capital. For obvious reasons, the Ukrainian economy does not have much free money at the moment. We need external grants, loans, and, most importantly, investments. It is crucial that this money goes directly to high-quality defence tech teams.
Defence tech is not cheap, so we are talking about hundreds of millions. Take our startup Buntar Aerospace, where we are working on increasing the survival rate of ISR UAVs up to tenfold using AI and Ukrainian first-hand experience on the modern battlefield. The project solves a rather complex technological problem in a very short time. During the first round, we quickly raised $2.2 million within the first year of the startup's existence. This seems like a great success, but if you look at our financial model, you’ll see that almost all of this money goes to R&D. Components are costly, and the development team is very expensive because it comprises many high-quality senior engineers—you can't solve this problem with juniors. Therefore, capital will significantly aid the development of Ukrainian defence tech if directed in the right way.
“In the US and Western Europe, there are many people with military experience and financial resources who are sympathetic to the Ukrainian army and eager to help. However, over time, donations alone are not a sustainable solution. You can help by buying equipment, but once it's destroyed, you have to raise funds again. This approach is neither scalable nor long-lasting. Instead, investing in a military startup that can grow, benefit the army, and generate returns on investment is a much more appealing and sustainable option.” – Kateryna Bezsudna, CEO and Co-founder of Defence Builder Accelerator.
In addition to capital, combining technological expertise with Western partners would significantly help Ukrainian defence tech rise sharply. They have the technologies we need but don't always know how to use them in modern warfare. And we do.
I’ll give another example from my own experience: our Buntar Aerospace has a whole team of AI engineers working on the visual navigation task. But the fact is that several companies in the West have this technology in a ready-made form! They have a different application, which, in our opinion, is less effective. But if implemented in our reconnaissance drones, it would change a lot on the battlefield. Often, engineers here struggle with tasks without knowing they are already available in the West.
We’re sure that many technologies could be borrowed. We are convinced that our Western partners would favor this cooperation because it would benefit them and help modernize their defence tech. If, heaven forbid, World War III were to occur, they are not ready. Technological and military cooperation with us (a country that is already in a major war) is the best way to prepare.
Many defense tech manufacturers, including Bayraktar, Rheinmetall, Quantum Systems, etc., have already opened production facilities in Ukraine.
Here comes the Defence Builder
Over 1.8 thousand Ukrainian defence tech developments have already been registered on the Brave1 platform launched last year. And there are more, as we at Defence Builder are not limited just by this funnel. A lot of projects are in shadow mode for safety reasons, but you can judge how successful they are by the panic some of them make behind our eastern border.
To give at least some examples, successful UAV projects like Skyeton and Airlogix developed agricultural drones before the full-scale invasion. They rebuilt themselves in a year and now supply drones to various units with great results. They are constantly improving the product, solving the real needs of the military.
In Defence Builder, we bring together the best teams, assist them in connecting three magic elements, and then help them meet with investors and Western enterprises. The accelerator program was crafted in collaboration with leaders of the Ukrainian tech ecosystem, including Sigma Software Labs and the Kyiv School of Economics (KSE). This program is aimed at helping Ukrainian defence startups grow and build investment-attractive ventures and make a real impact on the battlefield.
"War of technologies demands innovation. Although the war has slowed venture investment globally, defence sector is growing, uniting entrepreneurs, enterprises, the government, and the military. Ukrainian innovations are changing the industry with advanced tech solutions, and many Western technologies are being enhanced based on battlefield requirements in Ukraine, setting a quality standard for militaries worldwide. Defence Builder aims to connect Western investors and Ukrainian defence tech startups to jointly fund the future of defence innovations." – Daria Yaniieva, Investment Director at Sigma Software Labs, Board Member at Defence Builder Accelerator.
Our goal is not to make money but to rebuild our defence capabilities. We have no choice but to survive in this way, but the business is another part of the story, and we clearly understand this. We know where the investors are, how to work with them, and how to make Ukrainian fintech teams attractive for investment.
To sum up, the ideal scenario for developing defence tech projects is a joint venture that combines a Ukrainian team with the military, engineers, and management with a foreign company with capital and certain key technologies. By combining them, you can create incredibly strong companies and products. I am sure that this is the future of Ukrainian Defense Tech.
