Report: 59% of startups relocating from Ukraine choose Poland

The premise of the report

Polish-Ukrainian Startup Bridge (PUSB), together with the Warsaw Stock Exchange and Ukrainian Startup Fund, published a new report: “Startups and Business Ecosystem: Common Steps Towards The Reinventing Ukraine.”

PUSB has been researching the Ukrainian startup ecosystem for the last three years.

But the 2023 report marks the first time when the survey included not only the startup founders but also representatives of business environment institutions as well as organizations that play an important role in supporting young technology companies in Ukraine.

To create the report, the authors interviewed 107 Ukrainian technology companies representing the startup industry. In addition, the data also included answers from 54 representatives of business environment institutions from across Ukraine.

The key findings of the report

The report focused on several aspects of the conditions and attitudes present in the Ukrainian startup environment.

The condition of Ukrainian startups

PRESENT

• 46% of startups believe that the ecosystem is operating at a medium level. Though at first glance that may not sound exactly encouraging, could be considered a fairly positive result. The startup industry is still active, regardless of the war situation.
• 31% of startups in the past year have managed to raise investment capital.

FUTURE

• 90% of startups see great potential for growth in the future.
• 66% of startups in Ukraine and 35% of startups abroad indicate the need for investment capital in order to ensure further development.
• 62% of startups see flexibility and ability to adapt to changing circumstances as their major advantage.

RELOCATION vs. RETURN

• 59% of startups have not relocated from Ukraine since February 24, 2022, so since the beginning of the war.
• 47% of startups that left Ukraine plan to return to the country after the war ends. For reference: startups that have relocated abroad from Ukraine account for 15% of all companies surveyed.
• 59% of Ukrainian startups that decide to take their business abroad choose Poland as their relocation destination.

Startups and the efforts to rebuild Ukraine

According to the findings, almost 81% of the startup representatives believe that their products and services will play a role in rebuilding Ukraine, whether it comes to infrastructure, services, or other important aspects.

Another subject touched upon was whether the startups were ready for long-term participation in the country’s reconstruction process, as well as whether they were dedicated to the development of innovative solutions. The results seem promising. As many as 78% of startups declared that they are considering research and development work on new innovations to support the country's reconstruction, while only 22% do not consider such work.

When confronted with the question of who should be responsible for rebuilding the war-devastated country, 69% of startup representatives indicated it should be a coordinated effort of all groups: government, investors, and the international community.

54% of responses directly addressed the importance of the government. They believe that this is the institution responsible for providing a stable legal and regulatory framework, which could facilitate the operation of startups.

What is more, 41% of respondents agreed that the government should provide funding and support to startups participating in Ukraine’s economic recovery.

Poland – a tempting direction for foreign business

The previous data indicates that of all the Ukrainian startups that decided to relocate, 59% of them chose Poland. There are several factors that contribute to this tendency. Chief one, of course, is the geographical proximity of both countries. Without a doubt, in times when many lives were disrupted by the war, the fact that Poland is a part of the European Union and NATO offers an additional, and crucial, sense of security.

On the business side of the issue, Poland is a beacon for foreign entrepreneurs, with its skilled workforce, favorable business climate, and operating costs lower when compared to Western Europe.

The country's strategic location adds to its appeal. Its location within the EU offers access to a vast and varied European market. Geographically – Poland's location in the heart of Central Europe allows companies to cooperate with businesses in different time zones, spanning from Asia – in the mornings, to The Western Hemisphere – in the afternoon.

Moreover, Poland’s robust infrastructure and a growing pool of venture capital, provide a fertile ground for tech pioneers and startups.

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