The venture capital fund D3, which stands for "Dare to Defend Democracy," was one of the first public private investors in Ukrainian DefenseTech. Launched in July 2023, the fund's partners include former Google CEO Eric Schmidt. In an interview with Forbes Ukraine, fund partner Anton Verkhovodov shared the results and achievements so far.
Since its inception, D3 has invested in 14 startups, including eight Ukrainian companies such as Zvook, Frontline, Swarmer, Drone Space, Ailand Systems, and others. Notably, Swarmer received a second investment from the fund.
Recent 2024 investments include the Ukrainian drone navigation developer Flightmind, U.S. drone detection and destruction system developer Guardian, and drone startup Neros.
The fund has received inquiries from around 400 companies, including 195 drone manufacturers. There has been an increase in developers of general combat software and solutions for drone autonomy, with about 70 teams working in this area.
According to Verkhovodov, D3 seeks products with global ambition and significant technical added value, and FPV drones are becoming less of a priority. The main challenge is finding teams with global potential whose products will still be in demand after the active phase of the war in Ukraine ends.
D3’s typical investment check is $125,000, but one of the fund’s goals is to increase this amount, as it's difficult to create complex products with such funding.
In December 2023, D3’s managing partner, Evelyne Buchatski, said the fund planned to grow from $19 million to $30 million by July 2024, but this did not happen due to several reasons.
"Potential investors from pension and sovereign wealth funds are cautious about pure MillTech and are more interested in dual-use technologies. Most European institutions are still not ready to invest in defense funds, and Ukraine’s logistical distance also poses a challenge for fundraising. It takes 36 hours for an American to travel to Ukraine, and investors need to come and see what’s happening here," Verkhovodov explained.
Despite these obstacles, the fund continues to work toward its $30 million goal, prioritizing supporting startups to survive rather than just increasing the fund size.
