Ukraine has encountered acute political, security, and economic challenges since its independence from the Soviet Union. After a phase of stabilization, Ukraine’s long-term economic growth and transition to a market economy have been hampered by the confluence of adverse demographics, geopolitical tensions, and low investment rates. Neighbouring Moldova has been increasingly suffering from structural problems, resulting in low productivity growth and the lower-income population’s dependency on social assistance. The COVID-19 pandemic has only exacerbated these structural problems, jointly affecting the labor market, remittances income, and return migrants. The technology sector has the potential to be an important part of economic recovery and transition in both countries.
The fund provides growth capital to export-oriented companies, particularly established, later-stage technology leaders and new economy champions. The focus is on fast growing, mid-sized companies offering IT services and innovative IT products and operating from Ukraine and Moldova.
The IT industry has experienced record revenue in 2022 and despite the conflict with Russia, the asset-lite industry has been swift to adapt and relocate. It is expected to remain a driver for job creation, especially for young people. Supporting the growth of IT companies contributes to further formalization of the sector and better job security (SDG 8). Diffusion of technologies throughout other activities will lead to increased productivity levels and more innovation (SDG 9). The Fund and the Manager have already been approved by the 2X Committee as a 2X Flagship Fund. The woman-led Fund Manager is expected to continue to play a leading role in the promotion of women’s economic empowerment and gender parity in the local IT sectors (SDG 5).