Ukraine’s defense industrial base is powered by hundreds of startups—small manufacturers churning out drones in factories whose locations are closely guarded secrets.
This fragmented, decentralized production ecosystem is an advantage for Ukraine and a headache for Russian targeteers, but it presents a problem as the most successful of these startups try to scale and break into the increasingly crowded Western market.
Enter UFORCE, a Ukrainian startup and Ukraine’s first defense unicorn after it raised $50 million in funding in March of this year. UFORCE serves as a talent scout of sorts for Ukrainian defense tech companies. It acquires the companies that are making some of Ukraine’s most potent and novel capabilities and connects them to Western capital, management practices, and—soon it hopes—defense buyers.
UFORCE’s marquee products have earned their place on the battlefield. Chief among them is the MAGURA unmanned surface vessel (USV) that stalks Russia’s Black Sea Fleet and that has struck or sunk more than a dozen Russian naval vessels, including the Ivanovets, a guided-missile corvette. There is the Nemesis family of bomber drones, whose heaviest variant can carry a 22-pound payload 15 miles. And there is the Liut unmanned ground vehicle (UGV), a customizable platform capable of performing dangerous missions at the front that would otherwise fall on infantry.
UFORCE’s systems have operated in the highest-intensity combat zone on the planet. Now UFORCE faces a new challenge: the change-averse and incumbent-dominated defense acquisition bureaucracies of the Western world. Will it succeed?
First Breakfast’s Blake Seitz sat down with Oleg Rogynskyy, UFORCE’s co-founder and CEO, to discuss the company, Ukraine’s defense production success, and the lessons Western militaries should learn from Ukraine’s fight for sovereignty and survival.
Origins
FIRST BREAKFAST: Why don’t we start at the beginning. February 2022, what were you doing? And did you see yourself getting into defense tech at that time? Or was this a complete pivot for you?
OLEG ROGYNSKYY: I remember the exact moment when the war started. I was with my team at my first company called People.ai and we were coming out of a killer sales meeting. It was one of those meetings where you’re high-fiving each other in the parking lot afterward. And suddenly I look at my phone and have a thousand notifications: “Russia attacks Ukraine,” “Russia attacks Ukraine.” So I ran out right away and called my uncle, who was in Kharkiv. I ask if he’s OK and he says, “Can’t talk. We need to run.” And you could literally hear explosions in the background. I couldn’t sleep all night.
I flew to New Jersey the next day to meet with Verizon. And there’s one person at Verizon who completely changed everything for me. I’m sitting there at the lunch and he says, “You’re distracted, what’s going on?” I said, “I’m Ukrainian. My country’s on fire right now.” And he says, “You know what? Forget the agenda. Tell me how you feel.” And I told him.
Later he texts me a draft press release. And it says, “Verizon is about to make phone calls to and from Ukraine free.” I’m like, “Why are you doing this?” And he says, “You work with T-Mobile, AT&T, and all the others. Let them know before we do this.” So we did. And then suddenly everybody rushed to make calls to and from Ukraine free ahead of Verizon. He purposefully gave me the lever to create pressure on everybody else, and suddenly the friction of calling Ukraine disappeared globally within, like, six hours.
And I was like, “Wow. I actually know people who know how to move the needle.” That was the moment where it clicked for me.
Soon after, I go online and I see this blog post from someone I knew. It said, “Hey, Ukraine needs better eyes on the battlefield.” I start researching it and realize, obviously Ukraine needs that. Long story short, I put together a team of volunteers and we found donors to help Ukraine. And Ukraine then used it extremely effectively.
Two weeks later, I had a call with a few Ukrainians and they asked, “hey, do you know anything about Starlink?” Yeah, I do. I know the guy. They’re like, “well, we need Starlinks.” How many? “All of them. Yesterday.” And let me guess, you have no money. “Yep.” So the next thing that happens is a group of people come forward and pay for thousands of Starlinks.
Once you start doing that and crossing so many Rubicons, life can never be the same.
FIRST BREAKFAST: Fast forward a few years to UFORCE. What is UFORCE? And what is its origin story?
OLEG: So UFORCE is a result of that earlier work, in some way. As I was helping with connectivity and other support, there were a number of other grassroots groups inside and outside of Ukraine. What Ukraine did spectacularly in the first hours of the war was say, “We’re not going to exist unless all of you guys come together on this.” And they galvanized this community.
There is a very interesting article by Gillian Tett called “Inside Ukraine’s Open-Source War.” It’s a long read, but it’s spectacular. Her point is that in any society or culture, information travels up and down the hierarchy. But some places create this lateral exchange. Think of engineering cultures in some countries, or Burning Man, where different hierarchies learn to talk to each other laterally. And basically, that’s what you’re going to use when things start going wrong. Instead of waiting for hierarchies to produce outcomes, which is slow in politics, you activate all the lateral links. And I was one of the lateral links, and there were hundreds of other lateral links. And that’s what saved Ukraine.
To your question, there were other groups laterally that said, “We have Starlinks now. Well, there are Russian ships out there. Let’s build some drone boats.” Another group was like, “Well, we have some shrimp boats from before the war. It would be really easy to hire people to drive them around.” And then there were agriculture drones that had really good C2 and inertial guidance systems for precision agriculture. It turns out that if you combine those things, it creates the best weapons systems on the planet.
So the origin of UFORCE was when the drone guys started talking to each other. And it turned out that one of them, [Oleksiy Honcharuk, UFORCE chairman], was very business and politics savvy. So we said, we should probably do this together. And so the two teams came together and formed UFORCE in 2023 and it spread like wildfire from there.
FIRST BREAKFAST: So there are two ways that you could frame what UFORCE is. The first way to think of it is that this is an effort to bring Western capital, Western management practices, things like that to Ukrainian startups. What you’re describing seems like a much more bootstrapped, bottom-up effort by startups organizing themselves. Which version is correct? Or is it both?
OLEG: So it’s both. Initially it was this organic movement that created systems that were needed and then did 30,000 iterations to make them better with every cycle. They learned how to move fast. Someone wrote that it’s like the Cossacks, who served as a super decentralized quasi-government in 1600s Ukraine. They were extremely successful until they made the choice of siding with Russia against the Polish, which is probably one of the biggest mistakes Ukraine has ever made.
But then at some point, UFORCE was like, OK, we’re hitting the limit of what we can do organically. We need structure, we need capital, we need governance, we need all these things, and very few people in Ukraine had done that with Western investors. So I ended up being one of the two or three Ukrainian-origin CEOs who had raised a large amount of Western capital.
Ukraine’s Acquisition Advantage
FIRST BREAKFAST: Ukraine’s defense industrial base has scaled from making thousands of drones to making millions. What made that possible?
OLEG: Product–market fit. In Silicon Valley, you’re supposed to raise money, then you go and you talk to your users, and then you build exactly what they want, and then you iterate and iterate and iterate until you get a product that works. You know it works because they buy more, and you’ve got a growing list of customers and strong retention. That’s how Silicon Valley operates.
In defense, the traditional model is you win the budget five years out, and then you start working on something cost-plus where nobody is rewarded for speed.
Ukraine basically applied the Silicon Valley model to figure out product–market fit for weapons. Ask people what they want. Give it to them right now. Build it as cheap as possible. Get feedback. Get three percent better tomorrow. Rinse and repeat. So that really, really worked.
Then when they realized it was working, they built an acquisition system which they didn’t have before. One point we like to make is, in future wars there will never be a TRL [Technology Readiness Level] above 7. TRL 1 is an idea; TRL 9 is like an Abrams tank. TRL 7 is like, it kind of works, it gets the job done, it’s not sexy at all, there’s a lot of work to do. But the speed of iteration with which Ukrainian technology is changing is so fast that you’ll never have the time to get to TRL 8. Whatever gets to TRL 8 is already obsolete. And so that is the complete cultural shift that Western militaries are really not seeing—yet. Things are going to fly and they’re going to fail, so build in a way where you can use it and you can lose it.
FIRST BREAKFAST: You can’t afford exquisite when the Russians are knocking at the door.
OLEG: Exquisite is wrong, period.
FIRST BREAKFAST: Let’s talk about how Ukraine’s acquisition structure actually works. I’ve read about the Brave1 Market, which lets frontline users purchase equipment directly and determine what works for their specific situation. And then that distributed acquisition system drives the feedback loop. Talk about that.
OLEG: It gets way more interesting. So you get points, like Amex points, for verified results. And then, as the commander of a unit, you can go on the Brave1 Market and order things with your points. It’s like Amazon. There are user reviews. It tells you how many are in stock. You can pay extra points to have it delivered to you by tomorrow. All of that is built into a real-time supply chain.
Ukrainian government procurement is looking at all these reviews. They’re collecting the data and seeing, “oh wow, everybody wants to have this kind of drone, all the points are going there.” And they are making their supply-chain decisions and placing orders. So they are taking this experience and data of the best units and just projecting it with big orders while allowing companies like UFORCE to get to scale.
All of this is happening in real time. Contract to payment in Ukraine is incredibly fast because all the data is validated.
FIRST BREAKFAST: Is this innovative model one small share of the effort by Ukraine to move metal and equipment on the front? Or is this now how everything operates?
OLEG: Only part of it happens through points, and the rest is highly, highly informed acquisition based on user demand. You can’t go wrong buying a thing that everybody’s buying. And it’s not IBM. It’s things that might have been created yesterday.
FIRST BREAKFAST: Ukraine came into the war with its own equivalent of the primes or legacy manufacturers. Was there pushback to adopting this model from traditional industry?
OLEG: No. There was only one prime, a government prime, that was mega maxed out on capacity. And so this model was created to increase capacity, not to replace capacity. Prime, do your prime thing. We still need all of that and 10x more than you can do. We’re going to do this thing over here with all these drone hipsters. They’re not in your way. So that’s how it happened.
FIRST BREAKFAST: When people talk about distributed acquisition in the United States, they worry about duplication, waste, or delivering products to the front line that aren’t validated and can’t talk to each other. How do you respond to those sorts of criticisms?
OLEG: It was a mess in the beginning, but then you let the users vote. When a user review is like, “Oh, this thing works better with Palantir Maven and this one doesn’t,” if I use Palantir Maven I know what I’m going to buy in the next round. Ukraine purposely created a lot of competition, but then it uses data so that the riffraff gets cleaned out very quickly.
I think much of the inefficiency in the U.S. system comes from lack of data. Not from lack of money or desire or smart people. Ukraine said, “We’re going to do whatever creates data and then we’re going to listen to the data.”
FIRST BREAKFAST: What are the main differences between selling equipment to the Ukrainian Ministry of Defense versus selling it to the Pentagon or other Western militaries? And where are the big hurdles that you see to cracking the Western defense market?
OLEG: It’s much easier to sell to Ukraine, because Ukraine is absolutely a real meritocracy. If your equipment doesn’t work, it won’t exist.
Ukraine cares about ensuring that airstrikes don’t take out your production capacity. It’s a very different universe.
But the biggest difference is how Ukraine buys. The mindset has shifted from buying drones and buying kit to buying effects. So they’re not asking how many drones can I get for ten million dollars? They’re asking, what effect do I get for ten million dollars? It’s exactly what happened elsewhere in tech. You used to ask, how many servers do I get? Then, with cloud, the shift was to buying capacity. The Western world is buying tanks like we used to buy servers. Ukraine has, in this analogy, shifted to buying outcomes on the battlefield.
FIRST BREAKFAST: Digging into that, how does it work whenever the Ukrainian MOD says we want to buy an outcome. How do you stipulate that in a contract? How do you verify it? It is such a revolution in how we think about buying things.
OLEG: That comes from having validated data on what each system actually delivers in the field.
FIRST BREAKFAST: So basically the proliferation of electronics and cameras and everything else has made it possible for high command to verify the claims of all of its producers and tabulate it with this level of granularity.
OLEG: In real time. And it’s all validated.
That matters because a lot of Western vendors are saying, “Our stuff works.” But there’s a disconnect: investors don’t know how to get real data, so they believe the stories. And founders overselling is actually one of the most dangerous things happening in defense tech in the West right now, because combat is the only test that counts.
Building and Buying in the West
FIRST BREAKFAST: UFORCE wants to build hardware in the United States. Is it more challenging to build things in America than it is in Ukraine? Why or why not?
OLEG: It’s not more challenging to get started in the U.S. We don’t have a full profile of the costs yet, but you don’t get airstrikes in the U.S. You don’t get blackouts in the U.S.
But what’s harder in the U.S. is the demand side, obviously, because you have to explain to the U.S. why they need it. And then there is a lot of noise from people speaking from imagination rather than experience. But building in the U.S. is not much harder.
FIRST BREAKFAST: China is obviously the world heavyweight champion of manufacturing. Everybody is focused on securing their supply chains, trying to have ex-China supply chains. How much thought is UFORCE giving to creating a supply chain that’s independent of China? What are the challenges involved in that?
OLEG: We started on that early. We did it before we engaged with the United States. And we keep at it, because it’s never a one-off.
FIRST BREAKFAST: So the Maguras, everything else—there’s no Shenzhen in there?
OLEG: Correct. We are testing all the second and third-tier suppliers. If we ever find something, we replace it. We started doing this years ago for different reasons. China has been threatening to cut off Ukraine’s supply for many years now. And so we knew this was coming, whether we worked for the U.S. or not. And so the smart business decision a year and a half ago was to wean off China.
FIRST BREAKFAST: How challenging was it? What were the most difficult choke points that you had to get through?
OLEG: The challenging part was quantities. Because unlike programs built around small batches, we make units at combat scale, every day. And the things that make your average American defense tech company look good don’t even scratch the itch for our size. Most suppliers just don’t have the volume. And I haven’t even mentioned price.
FIRST BREAKFAST: Shipbuilding is a huge focus in D.C. The statistic everyone brings up is that China makes 200 times more ships than the U.S. You are fundamentally a shipbuilder, although it’s on a different scale than building a destroyer or an aircraft carrier. If you were advising the Navy about the future of shipbuilding, what would you tell them?
OLEG: Don’t.
FIRST BREAKFAST: Go small? Go robotic?
OLEG: Yeah. But realistically, it also depends on the maritime problem that you’re trying to solve. The U.S. needs big ships for various reasons. But for a lot of allied navies, think of small unmanned boats as an unmanned remote aircraft carrier, and you can have a lot of them for very little money. You literally can produce them, drop them in the water, and they operate autonomously.
We are at the precipice where saturating large maritime areas with unmanned systems is very doable. I can see a kill grid—which is like a grid of autonomous boat swarms—hanging out and holding the whole body of water against Shaheds, submarines, and manned craft autonomously. The only thing that’s missing is the gas stations. The boats will need to go back, refuel, and come back out. The Tesla charging network is missing. But the Tesla is already here.
FIRST BREAKFAST: That’s a good line. But do you think that applies on the other side of the world where distances are as vast as the Pacific?
OLEG: There are 27,000 islands in the Pacific. You can put a lot of gas stations there.
FIRST BREAKFAST: Parting thoughts. What message do you think that Americans and Westerners need to hear about what is happening in Ukraine?
OLEG: I’m shocked that up until recently, nobody asked the question, “Wow, Ukraine doesn’t have Tomahawks and they’re still managing to strike deep behind combat lines. What are they doing, throwing rocks or something?” Nobody in the West had been paying real attention to how you create the same effects, using duct tape and bubble gum, in some cases—but then the duct tape and bubble gum became actual, real weapons that took a completely different architectural engineering route. Nobody here was paying attention.
And now people are like, “How did they do that? Oh, they have boats and launch drones from the beach, and that’s how they hit hugely expensive targets for a fraction of the cost.”
I’m glad that learning is happening and acceleration is happening on the U.S. side. And actually, I want to give a compliment to the U.S. side: the learning I’ve seen since March is incredible. The country is moving. I really hope it doesn’t slow down. I wish others would realize it and start moving like the U.S. But it’s a shame we only started thinking this way so late.
FIRST BREAKFAST: It’s better to have a wake-up call now than against a peer adversary. So perhaps that’s the one positive aspect.
OLEG: Yeah. And let’s hope it’s not too late. China has been learning since February 24, 2022.