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Venture Funds

Point72 veteran targets $50M for Ukraine defense tech VC fund

Perry Boyle is targeting $50M for his flagship fund, which aims to back Ukranian early-stage defense starutps.

A former executive with Steve Cohen’s Point72 hedge fund is betting big on Ukraine’s brewing private defense sector.

Perry Boyle, who was head of equities and capital development for Point72, is nearing a first close on a flagship venture capital vehicle for MITS Capital, Boyle told PitchBook exclusively. MITS will invest primarily in seed and Series A rounds for Ukrainian defense startups.

Later this month, the firm plans to hold a first close on its flagship VC vehicle, MITS Lightning Fund, which aims to raise about $50 million.

The launch comes as a US presidential election nears and peace prospects for the war remain up in the air. Prominent US VCs, including Andreessen Horowitz and Cerberus Capital Management, have launched defense-focused strategies.

New York-based Boyle joined with Ukraine-based fellow founding partner Anton Melnyk to get MITS Capital off the ground. Denys Gurak, a former venture partner at FF Venture Capital, is the third founding member.

Perry Boyle MITS Capital headshot.jpg

Perry Boyle, MITS Capital

MITS opened its doors in January, functioning as a Ukraine-focused boutique investment bank and advisory firm. The firm also operates a defense accelerator program.

Melnyk—a one-time advisor to Ukraine’s influential Ministry of Digital Transformation—is also an on-the-ground force working to assemble a planned expansion of Ukraine personnel.

Perry has been touting his Point72 credentials, especially his stint as head of capital development, in underscoring his rapport with the world’s top limited partners. He has venture credentials, too, having hammered out deals while in a family office investment role, including defense investments.

Ukraine’s projected military budget for 2024 is approximately $41 billion, dwarfed by the $111 billion that Russia has earmarked for defense expenditures. The differential, according to Boyle, presents an opportunity for nimble and innovative defense startups to rake in institutional cash to fill the government’s fiscal gap.

MITS is especially interested in backing Ukranian startups merging technology with modern warfare, including autonomous vehicles and weapons, emerging drone innovations, AI applications to streamline defense supply chains, and laser weaponry.

To that end, the nascent investment manager’s first incubator cohort, unveiled on Tuesday, includes operators in a number of those specialties.

Reducing foreign dependence

Ukraine has been reliant on the US and other western allies to fund its war with Russia. In June, NATO pledged $43 billion to Ukraine in the next year. That cash will significantly narrow the gap between Ukraine’s defense budget and that of Russia.

Even if a peace deal comes to fruition, Perry said he remains bullish on the outlook for Ukraine’s defense scene. That’s because the cost of labor in developing new weaponry is far less than in the US. Ukraine also imposes far fewer regulations on weapons manufacturing, according to Perry.

Perry believes that Ukrainian-made tech would be of significant interest to other countries, including Asian nations threatened by China’s territorial claims, as well as African countries in the throes of conflict.

The MITS Capital leader expects significant investment into Ukraine startups to come from defense contractors linked to governments in those areas.

So far, there has been little outside VC investment into Ukraine. A scant $10 million of VC dollars were invested in the country last year, according to PitchBook data.

In marketing materials to LPs, MITS cast doubt on the ability of the US to maintain world order. The firm pointed to the ever-rising US national debt, plus high labor and capital costs, as well as stubbornly sticking to dated technologies that are “no longer competitive in global warfare.”

Featured image by Scott Peterson via Getty

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  • Michael Bodley Headshot
    Michael Bodley is a senior venture capital reporter at PitchBook News, covering top fund managers and developments affecting limited partners. Based in New York, Michael previously led TheStreet.com’s crypto coverage. He also reported for Hedge Fund Alert after breaking into journalism at the San Francisco Chronicle. Originally from Baltimore, Michael graduated from Elon University.
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