The U.S.-Ukraine Business Council (USUBC), KSE Institute, General Cherry, and the Ukrainian Council of Arms Manufacturers held Defence Day on June 25 — a side event of the Ukraine Recovery Conference (URC 2026) in Gdańsk. The event brought together over 200 participants: investors, government representatives, defense companies, and industry partners. The first part of the event focused on defense tech and consisted of two panel discussions, while the second covered the Defense Industrial Base.
The program opened with a panel titled "Ukrainian Defense Tech: Growth, Capital, and Partnership Opportunities," dedicated to how capital — including institutional capital — can help build the next generation of defense technologies.
Panelists included Valentyna Sakhno, Head of the KSE Business School; Danylo Vakhovskyi, Executive Director of General Cherry; Valeriy Krasovskyi, CEO of Sigma Software Group and board member of the Defence Builder Ecosystem; and Brian Best, Managing Director at Dragon Capital. The discussion was moderated by Daria Yanieva, President of the Defence Builder Ecosystem.
The panel opened with an overview of KSE Institute's reports, produced in partnership with Defence Builder. Valentyna Sakhno presented the findings. According to the reports, Ukraine's defense industry production grew 31% in 2025, driven primarily by UAV production, which accounted for 73% of total weapons production value.
Investment and grant funding remains disproportionately small relative to the sector's growth rate. In 2025, Ukrainian tech companies received $498 million in funding; an estimated 26% went to defense companies and startups — $129 million in investment and grants.
The next stage of the sector's development will largely depend on exports and joint ventures. KSE Institute estimates that more than 150 defense partnerships have already been initiated, over a third of them launched in the past year, mostly under the Build with Ukraine initiative. At the same time, the success and practical impact of these partnerships depend on several factors: access to financing, administrative capacity, and clarity of the rules of the game. This is why a significant share of partnerships remain at the memorandum stage without moving into practical implementation.
"Ukraine already knows how to build defense technologies for real front-line needs. The next challenge is capital: investment in the sector is still disproportionate to what it already produces — and that's where the biggest opportunity lies," said Valentyna Sakhno.
Danylo Vakhovskyi spoke from the manufacturer's side — on how to turn a solution proven on the front line into a company the world wants to buy from.
"Our industry grew from almost nothing, on so little capital that key players invested their own money — and the stakes for us go far beyond economics. That's what makes our companies adaptive. We're growing from manufacturers into a full ecosystem, built on joint ventures and partnerships. And when you raise capital, look for smart money: an investor who brings both R&D resources and access to global markets," — Danylo Vakhovskyi, Executive Director, General Cherry.
Valeriy Krasovskyi shifted the focus to capital and ecosystem-building — on turning strong teams into companies capable of scaling.
"Attracting an investor matters. But attracting smart money matters more. That means an investor who brings teams not just funding, but expertise and a wide network of contacts: opening doors to partners, customers, and new markets, and helping structure the company. This accelerates scaling and makes companies investable at a global level. For us, it's also a strategy — a way to more deeply integrate Ukrainian defense tech teams into the global tech and defense ecosystem."
Brian Best added the perspective of institutional capital — what a Ukrainian company needs in place before serious investors will step in.
"For an institutional investor, it all comes down to the ability to assess and manage risk. A company needs an investment-grade level of corporate governance — audited financial statements, protected IP rights, transparent disclosure. A separate challenge is clarity around sanctions and export compliance for these technologies. An investor wants to see that today's battlefield edge will become a sustainable business tomorrow — through long-term contracts and export markets — and needs to understand what an exit could look like in 5–7 years: an IPO or a strategic sale. Joint ventures are one working mechanism for technology transfer and customer diversification, and it's already working well," — Brian Best, Managing Director, Dragon Capital.
Participants agreed that a potential ceasefire would mark a turning point for the sector. Front-line demand will shift, but demand for innovation and ready-made solutions will remain — so the industry is more likely to reshape itself than to slow down.
