Entrepreneur and investor Denis Dovgopoliy has driven more than 250,000 kilometres since the start of Russia’s full-scale invasion of Ukraine in February 2022, travelling between Ukraine and Luxembourg and stopping in countries such as Germany, Poland and Switzerland as he criss-crosses Europe.

What, you may ask, is he doing? The short answer is: Dovgopoliy is raising support for Ukrainian startups.

Dovgopoliy, who has a degree from the faculty of aerospace systems at the Kyiv Polytechnic Institute and an MBA, is the CEO and co-founder of Unicorn Nest, a software-as-a-service that aims to help startups with fundraising by suggesting the most relevant investors from a comprehensive and constantly updated dataset. He’s also the founder of the GrowthUp business accelerator, which works with technology startups, and co-founder of the Ukraineplatform asbl, an initiative created in Luxembourg to facilitate cooperation between the Ukrainian and Benelux tech and startup ecosystems.

During an April interview at the Luxembourg House of Financial Technology, where Unicorn Nest has a desk, Dovgopoliy told Delano about some of the challenges faced by startups in Ukraine in their quest for funding.

250,000km to support startups

Dovgopoliy first started to come to the grand duchy in 2008, which he called a “main jurisdiction to incorporate venture funds.” “In November 2019, we visited Luxembourg to decide if we wanted to set up business there, and the answer was: yes. We incorporated Unicorn Nest in the spring of 2020.” Covid-19 restrictions posed difficulties for all sorts of companies, both in Ukraine and in Luxembourg, and then in February 2022, Russia’s full-scale war began. People were trying to relocate from Ukraine to other places and Dovgopoliy’s son went to the frontline to fight. “It was a really challenging period.”

Since then, Dovgopoliy has driven more than a quarter million kilometres and joined several initiatives to help startups. Over the last two years--besides developing his own business--he has helped raise a fund of a half a million dollars to support Ukrainian startups who meet a lack of fundraising during the first months and joined the Ukrainian Startup Fund as a supervisory board member.

“A lot of my friends [are] involved in the initiative for Seeds of Bravery,” he added. is a €20m project funded by the European Union, which aims to bring Ukrainian tech startups closer to the EU, promote the deep tech industry and simulate Ukrainian-based innovations by offering grants, additional financing, entrepreneurship and leadership programmes and more. Luxinnovation is one of the .

A “booming” startup industry

Before Russia’s full-scale invasion, the Ukrainian ecosystem was one of the “booming” industries in Europe. “We started in 2005 with a few people and now the total number of startups is more than 1,000.” These range from service-as-a-software startups in sectors like payments, agriculture, B2B, B2C, mental health or the automotive industry to those using artificial intelligence in videos, audio, data analysis and more. “AI is a technology, it’s not a direction,” noted Dovgopoliy.

But there are also military tech and fintech startups. A catalogue from the Ukrainian Association of Fintech and Innovation--released in 2023 with the support of the digital transformation ministry, the National Bank of Ukraine, the United States Agency for International Development (USaid), the International Finance Corporation (IFC), Visa and the Ukrainian Startup Fund--noted that there were 246 fintech companies on the market, with 33% of them operating on the international market. A law on virtual assets was signed in 2022; laws on cloud services and payment services took effect; and a bill on amendments to the tax code regarding payment services was signed into law, legalising electronic money.

Roughly 50% of the 150 fintech respondents were involved in the areas of technology and infrastructure, payments/money transfer or personal and consumer lending.

“Mismatch” in perspectives

What does Dovgopoliy want people to know about Ukrainian startups?

There’s a “mismatch” in the understanding of what a startup really is from a Luxembourg perspective, he replied. “The Luxembourg angels and venture funds [are] trying to finance early-stage startups with €1m revenue. But in Ukraine, that’s not an early-stage startup--it’s already a business.” As an example, “we have not enough revenue--I’m talking about Unicorn Nest--to raise money in Luxembourg. So we’re targeting Berlin, United States, Amsterdam, Vienna and so on. But for Luxembourg, we are un-fundable now.” Many of the Ukrainian startups that visited Luxembourg in 2020-21 were “disappointed” because it was too early for Luxembourg financing and were not able to relocate from Ukraine to Luxembourg because of high costs.

A second point: compared to Ukraine, Luxembourg is more bureaucratic and “more formal.”

“So now, I’m trying to negotiate with Ukrainain startups which can be ready to relocate to Luxembourg,” Dovgopoliy explained. “It’s mostly fintech and Web 3.0 startups because Luxembourg is trying to develop those industries, and they will take some advantages to be in Luxembourg,” such as licensing, the “sandbox” and the support offered to these industries. “Ukrainian outsourcing companies are also interested to be [here] and to work for Luxembourgish companies,” big and small.

While it’s true that many Ukrainian startups still dream about Silicon Valley, New York or Boston, “if you’re targeting financial markets--like, you’re a fintech--American markets are too competitive and very unfriendly to any digital assets,” he said. “Europe now is more attractive for such type of startups, and Luxembourg can be a good place.”

“The Luxembourg jurisdiction became number one in Europe for Ukrainians” after Brexit and the departure of their “favourite jurisdiction” from the EU. The grand duchy is perfectly located--with easy access to cities like Berlin, Paris or Brussels-- and is becoming a “must-visit place,” said Dovgopoliy, adding that he tries to set up meetings for Ukrainian startups every month. “If you’re trying to work with finance in Europe, Luxembourg is number one now, but this market is too conservative, and the changes will take some time.”

Mission: set up “right framework”

His “mission,” as Dovgopoliy put it, is therefore to “set up the right framework between the two markets,” Luxembourg and Ukraine. “It’s not charity. It’s business deals.”

The focus needs to be on investing in startups. “Luxembourg is a very friendly country for startups, [though] it’s really hard in terms of bureaucracy.” But there’s a lot of support from the ministry of the economy, the House of Entrepreneurs, the Chamber of Commerce, Lhoft, the House of Startups and other players. “I was shocked. It’s a really small country and everybody knows everybody. It’s really hard to jump in for foreigners, but if you have support from the government organisations, or semi-government organisations, it’s unexpected.”

“My previous business was investing and consulting for startups. I did more than 300 projects and helped more than 200 startups to set up business in a different country. And only two countries have such type of supportive level: it’s Luxembourg and Israel. I was more than surprised. It was firsthand experience: not my portfolio startups, it’s my own business who was very welcome to this country and supported.”

Dovgopoliy, who is also learning Luxembourgish, now knows many of the people in the ecosystem. He added, “It’s pure networking. In other countries, you try to find procedures. Here, you can find procedures plus people who understand how it works, and can take you by hand and work together through all the processes. It’s really fantastic.”

The tech event Nexus2050, taking place on 26-27 June, is welcoming . In partnership with the Luxembourg-Ukraine Chamber of Commerce, the programme will include roundtable discussions, keynotes and a selection of 20 Ukrainian startups with a focus on cyberdefence, fintech, space and telecom. Find out more about Nexus2050 .