Ukrainian fintech helping startups with wartime finance raises $1 million

Fuelfinance, a Kyiv-based fintech that develops financial management and planning software for startups, has raised $1 million, mostly from angel investors in the U.S. 

The company is helping other startups and established companies deal with what founder and CEO Alyona Mysko calls wartime financial management. 

"Wartime financial management is like financial management during any crisis," Mysko said in an interview. "So you simply predict different risks and try to optimize your expenses, be more efficient, spend less and have a higher runway. And still understand what expenses you should decrease, but you still should grow. You need to understand and have specific budgets for unpredictable situations." About half of Fuelfinance's customers are Series A or Series B startups.  

Fuelfinance team
To maintain normality during wartime, Alyona Mysko, founder and CEO of Fuelfinance (in the front row holding her dog), tries to keep a regular schedule and avoid reading too much news.

The fundraise comes toward the end of a tough year for fintechs and for everyone in Ukraine since Russia invaded and began bombing the country February 24, 2022.

The banking system lost more than 20% of assets and about 30% of customers due to war

and forced emigration, according to Rostyslav Dyuk, chairman of Ukrainian Association of FinTech and Innovation Companies.

"Fintech, which built its infrastructure on digital channels, after falling by 70%-80% during the first months of the war, recovered to 85% of pre-war levels," he said. "There are sub-industries such as digital lending that suffered more, but payments and non-banks are doing very well."

Many Ukraine startups have shown resilience throughout the conflict. Some have pivoted to provide products for the military or for businesses that help with the war effort. The total combined enterprise value of Ukrainian startups in 2022 was $23.3 billion, only a modest decrease from the $27 billion of 2021 and three times the size of the market in 2020, according to a report put out by dealroom.co. Statista projects strong growth for Ukrainian fintechs. The country's neobanking segment is expected to show a revenue growth of 66% in 2024. In the digital payments segment, the number of users is expected to grow to 25.19 million by 2027.

It's not easy, of course.

Asked if she is safe, Mysko said it's not possible to be safe where she is, but she and her team strive for normality. They have access to alternative energy and Starlink, the broadband internet service provided by Elon Musk's SpaceX, so they mostly work without interruption.

Half the team is in Ukraine. The rest, mostly women, have escaped to other countries.

When air raid sirens go off, the team staff heads to a coworking shelter, as they have done for the past eleven months. It's set up with tables, laptops and internet access, so everyone quickly settles back to work, she said.

"I think we are very resilient, adaptive and we already know how to deal with that for such a long period of time," Mysko said.

Among her keys to staying sane and keeping morale up during war: "Simply stay with the same schedule, wake up very early, and have this basic routine from day to day and not reading so much news," she said. "Be more focused on things that you can control and where you can create an impact. And also sharing the big vision and strategy with all our team members, what we do, that we hire Ukrainian employees and try to focus the team on that, not on bad news, what is going on." 

The company provides psychology sessions for employees "because we all understand that war is not very easy for everyone," Mysko said. 

For employees who have left the country, the company still has to provide remote support. One employee who joined the military forces in March is still there, and Fuelfinance still pays his full salary.

In a counter-intuitive way, the war has brought employees together, Mysko said. Physically, it has brought more people to the office who formerly worked remotely. 

"The office is one place where you have electricity, internet, and everything," she said.

But the war has also stiffened determination among the whole team. 

"Before, there was motivation about our company and what we want to achieve and how we want to build the new financial management for all companies," Mysko said. "But now there's an additional mission. And when you have these two strong missions together, help Ukraine win the war and build the future of financial management, we have so much motivation now. The only one desire that we have is to win this war. And we all understand that after our victory, it'll be another country and we'll have the greatest futures that our country even could have."

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