Development of the Startup Ecosystem and Its Impact on Innovation Activity in Ukraine

The article provides a comprehensive analysis of the startup ecosystem in Ukraine amid profound transformations driven by war, digitalization, and global competition. The study is based on a multifaceted methodology combining statistical data analysis, expert interviews with founders and investors, and monitoring of international innovation rankings. It explores the quantitative and qualitative growth dynamics of Ukrainian startups from 2021 to 2024, with particular focus on their adaptability and rapid evolution. The growing role of innovative entrepreneurship in the recovery and modernization of the national economy is emphasized, as well as the significance of startups as a key factor in integrating Ukraine into global technological value chains. As of 2024, Ukraine is home to over 2,600 startups, more than 300 of which operate in the defense technology sector. The total capitalization of Ukrainian tech companies has reached $4.8 billion, representing a 23% increase compared to 2022. This indicates the ecosystem’s adaptability and responsiveness to societal challenges. The article systematizes data on the geographical concentration of innovative entrepreneurship, sectoral specialization features, and funding sources. It is noted that 68% of startups are located in Kyiv, 15% in Lviv, with the remainder distributed across Kharkiv, Dnipro, and Odesa. The study also examines the activities of key support institutions, including the Ukrainian Startup Fund, IT clusters, accelerators, and international grant programs. It is noted that most Ukrainian startups integrate artificial intelligence technologies into their products and are oriented toward international markets. The stages of startup development, venture investment trends, average deal sizes, and the activity of foreign investors are analyzed. The average size of seed investments is found to be $180,000, while Series A rounds average $2.3 million. The main challenges hindering development are outlined: security risks, talent outflow, business relocation, legal shortcomings, weak cooperation with science, and the concentration of resources in the capital. The article argues for the development of regional innovation clusters, enhancing the investment appeal of late-stage startups, and building financial and mentoring infrastructure. Special attention is given to the potential of deep tech, green innovations, and the DefTech sector as drivers of future economic growth in the country.