Ukraine’s Drone Revolution Faces Its Toughest Test—And It Isn’t Russia - Newsweek

Russia’s full-scale invasion put Ukraine under immense pressure. But pressure creates diamonds, and if it’s value you’re looking for, look no further than Ukraine’s unique defense industry.

Since 2022, the sector’s annual production capacity has exploded from around $1 billion to $50 billion, and Kyiv is now a world-leading hub of defense tech where products are designed, tested, and immediately refined by the demands of perpetual modern war.

Now though, Ukraine’s innovators face a challenge that will surely prove harder to defeat than any Russian weapon. Kyiv must turn a fragmented wartime startup ecosystem into an industrial powerhouse that the West wants to invest in at scale without importing its bureaucracy—or watching the value created on Ukrainian soil migrate abroad.

Newsweek joined former Ukrainian Prime Minister Oleksiy Honcharuk—now co-founder and chairman of Ukrainian defense tech leader UFORCE—in Kyiv to discuss exactly how his company and the rest of the sector are working to solve this very problem.

Russia’s Geran-4, a jet-powered variant of the infamous one-way attack drone based on Iran’s Shahed-style UAV, is a fearsome weapon.

It can carry a 110lb warhead at reported speeds of up to 300 mph—too fast for many of Ukraine’s own drone interceptors to handle. Ukraine’s Air Force typically shoots down 90-95 percent of slower propeller-powered drones, but the interception rate of jet-powered ones is roughly 60 percent, according to Ukrainian Air Force spokesperson Yurii Ihnat.

Consider that Moscow launched more than 2,800 jet-powered UAVs into Ukraine last month alone, and you can imagine the scale of destruction they have caused.

Honcharuk, however, was remarkably relaxed. This, he said, is simply the nature of modern war.

"Every season Russia is trying to invent something really new to create a problem for us," he told Newsweek. "I’m sure that in a couple of months we’ll already have an efficient solution…I think this need to innovate is Ukraine’s superpower, not our disadvantage."

His confidence is well-founded. Ukrainian unmanned systems manufacturers, of which there are now more than 500 according to the Defense Ministry, have consistently produced minor miracles for the past four-plus years. The ministry says 95 percent of drones procured for Ukraine’s defense forces are now Ukrainian-made.

Put simply, Ukraine’s defense industry has perfected the art of designing, manufacturing, and deploying battlefield solutions at a rapid pace, and crucially, with a fraction of its adversary’s capacity and budget.

"The invention usually is driven by the purpose… for example, when Ukraine needed a way to target the Russian Navy, we invented the maritime drones."

Honcharuk was referring to UFORCE’s MAGURA family of unmanned surface vehicles. Ukraine’s navy was no match for Russia’s Black Sea Fleet when the war began. Within two years, MAGURAs had destroyed well over a dozen Russian vessels, inflicted an estimated $500 million in damage to the Black Sea Fleet, and helped break Moscow’s blockade on Ukrainian ports.

The same logic applies to land and air systems. "Russia and Ukraine, we have asymmetric capabilities… in Ukraine we don’t have the same amount of big aviation bombers, so we had to develop a different capability," Honcharuk said. "Now you have heavy bombers like the Nemesis drone, which are incredibly efficient."

Kyiv in turn has adapted its procurement system to reward what works on the battlefield. The Brave1 Market, often described as a military Amazon, lets front-line units turn verified kills into ePoints they can spend directly on more drones, ground robots and electronic-warfare systems. More than 500,000 drones have been ordered by Ukrainian soldiers on the platform to date.

"This is part of our life. That’s actually why our team became so efficient; we wanted to survive," Honcharuk said.

But that mindset comes with its limitations.

Ukraine’s defense industry evolved out of necessity to ensure Kyiv’s survival. To thrive, and ultimately win, Ukraine has to graduate from startup mode to scaleup mode.

Ukraine does not lack technology—it lacks the money and industrial muscle to exploit all of it.

President Volodymyr Zelensky last year declared the defense industry was underfunded and said Kyiv could produce more than 8 million drones per year if provided with enough capital.

Foreign money is arriving, but mostly through public channels. Roughly $6.1 billion went into domestic arms production in 2025 from direct purchases by Western governments, partially funded by proceeds from frozen Russian assets. For comparison, publicly disclosed private investment across Ukraine's entire defense-tech sector only reached $105 million in 2025, according to Brave1.

To realize its true potential, Kyiv needs to unlock the endless resource that is Western—primarily American—private capital.

Ukrainian defense companies were built to solve the next battlefield problem, not court American venture capitalists, navigate complex regulation, or suffer the due diligence process of a global defense prime contractor. For many, technical sophistication has raced far ahead of their legal, business and commercial machinery—and that makes it hard to get through the door of a major Western investor.

"If you are like a small Ukrainian company, you usually don't have access to a big player," Honcharuk said. "You are in the position of a small brother."

UFORCE is one of a few companies trying to solve that problem.

It combines nine Ukrainian defense firms spanning air, sea, land and counter-drone specialists into one business entity headquartered in the U.K. The aim is to preserve each individual manufacturer’s ability to innovate at speed while building the corporate machinery needed to offer Western capitalists a commercial proposition they recognize.

"We are trying to build a global company with the ability to help other governments to build their unmanned system forces," Honcharuk said. "The closer Western companies get to this reality (of warfare in Ukraine), the more efficient they could be in preparation for the potential big fight. We want to show that you can potentially have a price per kill on the battlefield with thousands of dollars, not millions of dollars.

"With a strong team, a good reputation and a brand, it's easier to build cooperation with other big players."

Honcharuk spent more than a decade in law before moving into Ukrainian politics. He served as deputy head of Zelensky’s Presidential Office and went on to become the nation’s youngest ever prime minister in 2019. His CEO, Oleg Rogynskyy, is a Ukrainian-born Silicon Valley entrepreneur who founded global enterprise-AI firm People.ai.

Their approach seems to be working.

In March, UFORCE raised $50 million in a seed round led by Lakestar and Shield Capital, taking its reported valuation above $1 billion. It then appointed former senior Homeland Security adviser Sean Plankey to lead operations stateside in May, and last month inked a memorandum with an Oregon-based company to co-produce MAGURA maritime drones for the U.S. military.

Getting through the door is only part of the challenge. Once Ukrainian companies begin sharing technology and production with foreign partners, Kyiv has to make sure the Americans and Europeans don’t simply extract the lessons Ukraine paid for in blood.

Ukraine's Defense Ministry has described intellectual-property protection as "essential" when establishing joint ventures with foreign companies, and created a dedicated IP department after identifying serious weaknesses in how its military inventions were protected.

But Honcharuk was as cool on this count as he was on the threat of Russian Geran-4s. In a statement you certainly wouldn’t expect to come from the chairman and co-founder of a leading Ukrainian drone company, he said: "The main value in Ukraine is not some specific drone.

"Every three, six months, it's already outdated. It doesn't make sense to try to copy something."

In his mind, the real value of UFORCE and Ukraine’s defense innovators is far harder to replicate—the institutional knowledge of how military manufacturing and procurement must be adapted to meet the demands of modern war.

"What's unique and what's super valuable is the way you think about the battlefield, how you think about the innovation cycle, and how you are playing this game in order to be faster than what the enemy is doing."

That gives Ukraine room to be aggressive rather than defensive about technology transfer. Honcharuk wants Western engineers working on Ukrainian systems because they bring knowledge Kyiv doesn’t have.

"In Ukraine, we don't have the ocean, so you need to attract and involve new specialists with that expertise, while applying the Ukrainian experience and learnings," Honcharuk said.

UFORCE's MAGURA fleet again provides a working example of the chairman’s argument. The family of maritime drones was forged around Ukrainian operations in the Black Sea, but a new British-developed model—the MV7—has been redesigned to operate in colder temperatures and the harsher conditions of the Atlantic.

Ukraine needs Western capital to turn its wartime innovation machine into lasting industrial power, and Western technology and expertise to introduce knowledge Kyiv’s engineers could not get anywhere else. The West, Honcharuk argues, needs the thing Ukraine was forced to learn the hard way: how to make its industrial heft and procurement pipeline move much, much faster.

"It’s super important to understand that maybe now, for Western countries, it looks like you have a lot of resources," he said. "But believe me, trust me, if you are not efficient, you will lose this advantage in a couple of months (of war).

"We need more brains. You always want to have better brains on your side. The more bridges we have between Ukraine and our allies, the better."