Defense-Tech startups in Ukraine are confronted with the possibility that their main developers can be mobilized at any time if they lack a codified product status and a contract with the state. This issue affects numerous companies in the industry that are still in early development phases. The critical status is the only official mechanism that allows defense companies to protect their employees from mobilization, but only if they fulfill a genuine defense contract.
The situation is particularly challenging for software companies developing solutions for the military, such as management systems and communication tools. These firms can create essential products for the front line, yet often do not meet the criteria for critical status because they lack a traditional production cycle or defense contract. Igor Fedirko, the director of the Armaments Council, describes this as a serious problem for the entire tech ecosystem.
Without critical status, companies struggle not only to protect their employees but also to plan their production and secure long-term investments. Yuri Humenchuk, head of the Trident Group, emphasizes that the market is growing rapidly, and many companies are still transitioning from development to a fully-fledged product. He calls for a differentiated assessment of these teams based on their actual maturity level.
Overall, about half a million people are employed in the Ukrainian defense industry, spread across more than a thousand manufacturers. The high demand from the armed forces means that many Defense-Tech startups exist without finished products.
