Challenges Facing MilTech Development in Ukraine: Lack of Funding and Skilled Personnel
The development of the MilTech sector in Ukraine is significantly hindered by a shortage of working capital and the government's inability to purchase all domestically produced goods, according to Alexander Kardakov, founder of Octava Capital and an IT millionaire, in an interview with NV.
One of the primary challenges impeding the growth of the MilTech sector in Ukraine is the lack of working capital and the government's failure to buy all domestically produced goods. This was revealed by Alexander Kardakov, the founder of Octava Capital and an IT millionaire, during an interview with NV.
Discussing the current job market situation, Kardakov stated, “I always find specialists of any profile.” He acknowledged that while there are indeed staffing issues, they can be addressed. “They exist, but they can be solved. The right people are coming in. The funniest part is that it is difficult to find designers who prepare factory documentation. Creative individuals do not want to come here,” he added.
According to Kardakov, most people are accustomed to traditional working methods, such as using drafting tables and paper, and only a few are willing to work with new tools and perform monotonous tasks. “This is the biggest problem. And those designers, specifically mechanical designers, who can develop something new, should be followed by a design bureau that describes everything for production and technology. It is very hard to find those who will describe this and do the more tedious work,” he emphasized.
Kardakov also discussed the shortage of working capital in the MilTech sector, noting, “Technically, this is a complex issue. Who will be given money for something that someone is selling, and it is unclear to whom?” He admitted that currently, this situation is akin to “an equation with three unknowns.” He pointed out that banks are currently cautious about financing, which creates additional difficulties for businesses.
When the topic of investment in Ukraine arose, he remarked, “There will be no investments in Ukraine for a long time. The country is not suitable for investment.” In response to a question about what makes Ukraine unsuitable for investment beyond the ongoing war, he stated, “Everything. In none of the recent scandals has anyone been punished. I am even too lazy to talk about it. I don’t even discuss it internally anymore.” Kardakov also emphasized that a portion of the funds that entered the country was lost, particularly during the reconstruction of the Tripoli TPP, with money passing through fictitious firms.
Kardakov reminded that in 2025, Ukrainian defense startups attracted over $105 million, which he characterized as “pitifully small.” “At this moment, do we have any weapon technologies that are unknown in the West? Regarding drones, we have practically lost our leadership. Currently, there will be no leadership regarding interceptors. The same Quantum-Systems (Germany) has done well! They created a reconnaissance drone, then bought Ukrainian companies, and are now smoothly operating there,” he noted, emphasizing the speed at which technologies flow between countries.
Kardakov concluded that there is practically nothing left to protect today, as companies around the world engaged in this field have access to everything. “These $105 million are fragmented purchases of what they want to acquire to accelerate their projects,” he summarized. Previously, it was reported that Ukraine had achieved a significant breakthrough and can now produce drones with minimal reliance on Chinese components.