Inside Ukraine's N1 fintech fund

Ukraine's fundraising landscape will take some time to get back up and running again, says Nykyta Izmaylov, an entrepreneur now helming the fintech specialised VC fund N1.

In reality, new inbound funds are unlikely to materialise until the end of the war, with much of the focus on rebuilding infrastructure to receive money across borders.

"If we are talking exclusively about Ukraine then the fundraising landscape, as they call it, indeed does not exist in the country, as such.

"It was destroyed as much as the cities in the southeast were destroyed, were demolished simply to the ground."

"We had a very big focus and attention on connecting people in Ukraine and this year we have spent exclusively on rebuilding, and re-creating the European infrastructure," said Izmaylov.

Izmaylov's track record includes owning the nutritious beverage producer EatEasy (elsewhere in Europe, it's called Spraga), and a 10-year tenure as CFO of iGaming platform Parimatch Tech. For his latest fund, the typical ticket size is $200,000 to $2 million, enough for around 10-15% of the target company's valuation.

The venture at Parimatch Tech is going from strength to strength. Parimatch has grown to a headcount of almost 3,000, operating in 25 markets. Izmaylov stepped aside from the day-to-day operations in 2016 to become a shareholder, freeing his hands to focus on N1's fundraising efforts.

Around 90% of the N1 portfolio is tracking just five startups; in Kyiv it is backing the low-code payment Asquad, smartphone payment portal Transenix, and challenger bank/P2P transaction facilitator Sportbank.

The latter has grown to become Ukraine's second-largest mobile bank with more than 500,000 customers, processing 10 million peer-to-peer transfers to date and taking plaudits in several awards programmes, at the Annual FinAwards and the Ukrainian Fintech Awards.

"For Sportbank, our main partner on this project is Sergiy Tigipko, who is also the owner of TascomBank, which is our root license. And as a project, as a neo-bank, we take funding from TascomBank, which, despite the current war, has excellent financial stability and shows itself to be a very reliable long-term partner."

"And we are doing very well in this regard. We do not need to attract additional funds and money. We are very well provided for in this respect and we are satisfied even with the results that the project shows in wartime."

Meanwhile N1 has also looked overseas for dealmaking, specifically to London's fintech ecosystem and Steadypay, a provider of credit to freelancers that uses open user data to predict financial solvency. Steadypay received an investment from N1 at the end of last year.  "In the future we plan to use this year's experience to further development," Izmaylov concluded.

This article is part of Tech.eu's highlighting of remarkable Ukrainian startups on the one-year anniversary of the Russo-Ukrainian War. Read more ...