Established in 2023 by Eugene Zhebko and Anton Hetman, TELETACTICA is a Ukrainian military tech startup that is developing long-range radio communication systems. The startup offers a range of services, including R&D support for local businesses, spanning from initial samples to the final stages of product development.
As military technology gained more popularity worldwide, it also encountered increased challenges, including fundraising. Eugene Zhebko recently shared the journey of TELETACTICA on LinkedIn, providing insights and lessons gained from his experience. Vestbee published the co-founder's post.
We recently finished communication with one of the Ukrainian early-stage funds, and the experience was surprising and raised many questions.
Most funding initiatives in Ukraine are focused on early-stage products. This means that the interest level in a product should start with a verified hypothesis and increase once the market fit and initial product requests have been confirmed.
For example, our company is currently working on the development of a communication system specifically designed for military purposes. Over 1.5 years, we have gone from the initial idea to the implementation of a complex multi-stage verification process involving specialists from various special services. The system has been tested under the active radio suppression from EW (radio-electronic warfare station) with appropriate protocols, and we have attracted several rounds of angel investments as well as become a part of our first government contract with trusted partners.
How did we do it without institutional support? We continuously developed our direct communication with end-users. The military needs it more now, so they are ready to move ahead as quickly as they can with these communications.
Returning to our previous theme, the representatives of the fund have informed us that they “are not ready to move forward” after six months of communication. Their reason for this decision was that there were “not enough positive reviews”, at this point. However, this is expected as we are gradually implementing new solutions. War requires such strategies because the reliability of the systems we use directly impacts the safety and effectiveness of operators and systems overall. Therefore, adequate precautions must be taken.
To be clear, if we can overcome this obstacle on our own during the war, we won't need to rely on such funding because our needs will change based on the company's market capitalization.
Does the early-stage fund fulfill its function in such a situation? Definitely not, at least from our perspective. Do we really want the miltech industry to be structured in a way that forces us to turn to foreign VCs on early-stage when we are most vulnerable? Or should we rely on civil society that is already giving everything it can to buy the most important things for its loved ones, who are currently on the frontline?
In my humble opinion, this is not the right approach, as it contradicts many of the ideas I presented earlier.
Will we be able to overcome this? We'll see. Our team is made up of specialists who have experience developing communication systems for satellites, radio monitoring systems for security services, and automated control systems. We have a clear understanding of where we need to go, and we're determined to do everything possible to get there. We believe that every new challenge brings new opportunities.
The lessons we have learned during our journey:
- One has to learn how the intelligence services really work: legally and practically. Often, we have to deal with foreign military and technical intelligence, and in many cases, one won't even realize that contact was made.
- If your trusted partner is NOT the government, it's important to find a reliable partner with more industry experience than you already have (and the ecosystem should help in this).
- The main goal of state initiatives regarding defense technology is to develop an internal ecosystem, rather than creating a “world training ground.” The world will find opportunities to test their technologies regardless, but we must focus on testing ours.
- Investments in defense technology should primarily focus on protecting national interests. Therefore, it should be of great interest to local VC funds, the Ministry of Defense, and other specialized state institutions. For example, the NATO Innovation Fund mainly concentrates on the internal products of the Alliance.
- Most of the miltech products in Ukraine were created thanks to private funding (and it is a miracle that many of them even appeared at all and were able to overcome the first frontiers of the Valley of Death, a feared phase in the startup life cycle, typically occurring after the company launches a product but has not yet seen any revenue).
- The selection and support of projects (companies, products, and tactics they implement) should be based on developing their diversity, which is the only guarantee of security, particularly during wartime.
- When the private sector in Ukraine started developing complex military-oriented technologies, the VC's focus should have been on the competencies of the teams involved, rather than solely on the current TRL (Technology Readiness Level) status of the product. This is because the skills and abilities of the team to quickly change a product are more crucial in determining success than just the actual status/characteristics of the product. In times of war, the product is constantly being studied by an enemy because knowing the enemy is half the battle won.
- To ensure quick and secure integration of innovations, it's important to implement simple and effective mechanisms. This includes compliance and information protection (based on world practices), using qualified algorithms for operational acceptance testing (OAT), verifying technological developments rapidly, reserving employees for critical infrastructure, promptly informing the General Staff and the Ministry of Defense about current and new developments, providing quick access to government orders and fundraising opportunities.
