Investment Review: What the Challenger Accelerator Program by Civitta Is and What It Can Teach
What benefits can AI startup founders gain, and what risks should they take into account?
In the special project “Investment Review,” Mind takes a closer look at opportunities for profitable investments. However, this article will differ from the usual ones. Instead of discussing where to invest money, we’ll focus on the opposite — how to obtain it. And not just funding, but also a range of other opportunities for growth. The editorial team explored the Challenger Accelerator by Civitta to understand the advantages and drawbacks of working with this organization, while also assessing startup accelerators as a phenomenon.
A startup accelerator is a business program that supports early-stage companies through funding, education, and mentorship. The core idea is to take under its wing teams of entrepreneurs with little or no prior business experience and help them at the stage of building their projects. In return for such support, organizers of accelerators typically receive a stake in the startup or a share of its future investments.
At first glance, the situation looks win-win — but is it really that seamless? How does Civitta’s accelerator differ from its counterparts in other countries? And can Ukrainian teams realistically join global programs? Let’s first look at the history and balance of power in this field.
How did startup accelerators emerge and evolve?
The first startup accelerator in the modern sense was Y Combinator, founded by Paul Graham and partners in 2005 in Massachusetts, USA. Later, the accelerator shifted its focus to Silicon Valley, the world’s main hub for venture business.
Y Combinator has not lost its leading position and remains a trendsetter in the venture capital world. In particular, they were the ones to develop the now-popular SAFE agreements (Simple Agreement for Future Equity). These agreements embody the core essence of the entire relationship system between startups and early investors — defining the allocation of shares and finances depending on future events. Such future events may include raising a new investment round or even going public on the stock exchange.
Such an event becomes the exit point (exit) and the ultimate goal of acceleration programs. After all, their aim is not to participate in business for many years following the Warren Buffett model. The mission of an accelerator is literally reflected in the meaning of the word itself — “acceleration” in English means speeding up (from the Latin “accelero”). By giving a team an initial boost — support at the early and most risky stage — an acceleration program performs an essential function: enabling businesses to get on their feet at a time when bank financing is either unavailable or, if available, tied to high risks of default.
The ratio of exits to the total number of program participants is one of the key performance indicators in the industry. According to Betaboom, the highest current exit rate of 33.6% belongs to the accelerator AngelPad. However, AngelPad’s portfolio includes only 119 companies, so the absolute numbers are not as significant as those of the recognized industry leaders. These are 500 Global, Y Combinator, and Techstars, which show exit rates of 15.8%, 11.1%, and 11.1% respectively. Importantly, these results are achieved with a far larger number of program participants: 500 Global has 2,400, Techstars has 4,600, and Y Combinator has more than 5,200. Of course, these numbers evolve over time, but their scale clearly illustrates the magnitude of their operations.
It is important to understand that support in moving toward the next funding rounds is not the only value that acceleration programs provide. Moreover, in the race for quick money, startup teams may risk losing more than they gain. That is why mentorship, legal support, and access to corporate clients can often prove more valuable than funding itself. We will take a closer look at this point through the example of the Civitta accelerator.
Who are the beneficiaries of Civitta and how is its management organized?
Civitta was founded in 2010 in Estonia as a management consulting company. Its founder and CEO is Adam Saulius Vaina, who created the project after 10 years of work at McKinsey & Co. Today, the group unites more than 30 legal entities across 21 countries. The Ukrainian subsidiary, Civitta Ukraine LLC (details – youcontrol), is 100% owned by Civitta International. The company is managed from Kyiv by Tetiana Palamarchuk, with Kyrylo Kryvolap serving as a partner. In addition to the capital, Civitta also operates offices in Lviv and Uzhhorod.
The company’s leadership team is publicly available and presented on its official website
Civitta does not run its acceleration programs on its own. The co-organizer is Radar Tech, with ESTDEV and the Ukraine-Moldova American Enterprise Fund (UMAEF) as general partners, and TRINITI and GitHub among the partners. Of particular note is the unicorn partner, Helsing, which in Q3 of this year raised the largest investment in its development within its Series C round — $488 million.
Would you like me to adapt this into a more investment-review style, with emphasis on why such partnerships (especially with a unicorn like Helsing) strengthen the credibility of the accelerator?
In addition to direct participants and partners, the program also engages a network of mentors, including representatives of leading global companies such as Nvidia and Intel.
What is Civitta’s business model?
Challenger AI 3.0, as the name suggests, is already the third edition of this program. However, if we look at the overall number of acceleration programs organized by Civitta worldwide, the figure has already exceeded one hundred. This consistency allows us to analyze Civitta’s acceleration programs in a more systematic and comprehensive way.
The main feature of Civitta’s Challenger project is its non-equity accelerator format. This means that the company does not claim any ownership (equity) in the startups’ businesses. An alternative and widely used global practice is different—businesses that go through an acceleration program give up a percentage of their company at an early stage.
As partner Yuriy-Volodymyr Blavt mentioned in an interview, the non-equity model was chosen in part due to its greater speed and clarity for the business. If an accelerator claims equity, it may have to wait 5–7 years or more until the startup grows to a significant scale.
In contrast, the non-equity format is straightforward: the accelerator receives up to 5% of the funds raised by the team within the year following the program. The arrangement works like this: “If the accelerator helped the team secure funding, it is entitled to a corresponding reward.” If no funding is raised, no one owes anything to anyone.
The accelerator’s expenses are primarily related to employee salaries, marketing, organizing events (such as hackathons and demo days), and running the program itself. The goal is to select 12 of the best teams from over 100 applicants during preparatory activities and then help these teams grow to the point where they can attract resources from venture investors, funds, or corporations. Thus, the accelerator focuses primarily on projects with visible potential.
Details about the current Challenger AI 3.0 program can be found on Civitta’s website. In this article, Mind shares its own impressions after reviewing the program and speaking with company representatives.
Who has successfully completed Civitta’s program?
The quality of an accelerator program is reflected primarily in the achievements of its alumni. Notable examples include:
Getpin – The only tool for businesses to manage customer experience across third-party online platforms. Getpin provides a unified technology platform that synchronizes business information and customer reviews on platforms like Google Business Profile, Apple Business Connect, and Facebook Graph API. The team was mentored by Raul Liive. Last year, the startup raised $400,000 from the Czech fund Presto Ventures.
Beholder – Develops precise 3D geological models to identify the most promising locations for mineral extraction. Among other achievements, the startup secured €600,000 during a startup pitch at Latitude59, a technology and entrepreneurship conference in Estonia. Overall, the team raised approximately €1.5 million during the event. On December 11–12, Beholder will be presented along with ten other Ukrainian projects at the AI Summit in New York. The mentor was Sasha Komarevych from Bocconi University in Milan.
Gios – An interactive AI-powered online school for learning mathematics and developing critical thinking skills for students. According to Crunchbase, the startup has already raised over $0.5 million for development. Mentors in the accelerator program included Ihor Kostyuk and Karin Künnapas. The team had particularly fruitful cooperation with the mentors: founder Natalia Limonova later traveled to Estonia with Karin as part of post-acceleration collaboration.
And despite the presence of such bright cases, not all companies become “stars” or future unicorns. Winning the competition and making it into the 12 participants of the program gives a team access to support, but not a “lucky ticket” to a cloudless future. What they gain depends both on the people involved and the overall market conditions.
What benefits will startup teams get?
Yuriy Blavt highlighted three “superpowers” of Civitta’s program:
- Raising funds, including grants.
- Connections with corporations.
- Mentorship.
Funding is the first and most obvious need of startups. For example, the winner of Challenger AI 3.0 will receive $25,000 from UMAEF. In addition, finalist teams will be assisted in securing resources both from investors and grants. According to available statistics, 80% of funding comes from European Union countries.
Connections with corporations offer the possibility of acquiring direct clients at early stages. Alongside the already mentioned global leaders Nvidia and Intel, Ukrainian companies such as PUMB and MHP are involved in promoting startups and using their products.
It is precisely the B2B (business-to-business) format, rather than products for retail customers, that currently attracts most of the startup teams applying for participation. One of the leading accelerators, Alchemist, has chosen to work exclusively with B2B projects. Civitta does not impose such restrictions, only noting the quantitative predominance of B2B teams.
Mentorship involves working with real business experts. Finalist teams have the opportunity to initially interact with different mentors, and afterward, collaboration is formalized by mutual agreement.
Program structure: selection and implementation
The program, which will include 12 winners, lasts three months. During this time, teams can closely interact with three categories of mentors:
- Lead Business Mentor – an expert in business development.
- Tech Mentor – a specialist in technology and programming.
- Specialized Mentors – for specific topics.
The intensity of interaction is not strictly scheduled (this is not a school with fixed class times) but is determined by the mentor–startup relationship. Based on past programs, teams can expect roughly 10 meetings with a business mentor, 3–5 with a tech mentor, and on-demand sessions with other specialized mentors. All meetings are conducted online, as most experts work for global companies outside Ukraine. All mentors are listed on the Civitta website.
Here, the first potential risk becomes apparent – the inability to establish productive interaction between a startup team and a mentor. As Civitta explained, both parties participate in forming these pairs. It is crucial for program participants to find a mentor (especially a Lead Business Mentor) who best fits the needs of their specific project in terms of both hard and soft skills. If this “match” does not occur and misunderstanding replaces productive collaboration, it is unlikely that the three-month program will deliver significant results.
Another risk is the unwillingness to learn and follow advice. Naturally, an entrepreneur or startup founder will have ambitions and personal pride. However, during the program, it is important to replace any arrogance with the ability to collaborate within a team. A mentor’s role is not to “reshape” the project according to their own vision, as no one understands a startup better than its founders. Nevertheless, constructive and sometimes tough criticism can be an essential part of the process.
Challenger AI 3.0 Program Schedule
- September 16: Applications open.
- November 24: Application deadline (23:59 CET). During the following week, teams will find out if they have been selected for the Pre-Acceleration Bootcamp.
- December 12–13: Pre-Acceleration Bootcamp. Teams will have the opportunity to pitch their solutions to investors, receive feedback from mentors, and meet industry experts.
- January – April 2025: Acceleration program.
- April 2025: Demo Day. Teams will present their startups to investors, clients, partners, and the media at the program’s finale.
- April – June 2025: Post-acceleration individual support, connected to potential investors, partners, or other programs.
How to participate: To be eligible, a team must have a product at the MVP (Minimum Viable Product) / Demo stage or close to it, and consist of at least three members. Startups should be built around artificial intelligence capabilities.
Demo Day deserves special attention as it provides a convenient opportunity to present a startup directly to a wide range of investors. Participation from funds such as U.Ventures, ZAKA, Tera VC, Change Ventures, and others has already been confirmed. However, one key risk should be noted: the presence of investors does not guarantee their willingness to invest.
New programs continue to emerge. In Kyiv and Lviv, according to StartupBlink, alongside the Ukrainian partner Civitta RadarTech, names such as YEP, CfE, and others are highlighted. In other words, there are many accelerators and startups, but the number of investors is limited. Therefore, when choosing a program, it is important to understand which circle of potential contacts you can rely on in the future. Will there be people at Demo Days with real capacity to invest in your project, or just to share expert opinions? Accelerator Challenge is a relatively young program that will need to compete for the attention of leading funds and business angels.
Online communication opportunities now allow startups to choose from among many global programs, so it’s worth considering these options. Of course, there’s another side to the coin—not every accelerator will accept every applicant. Proficiency in English is a key requirement for startup founders, and the Civitta program is no exception.
Is the timing right for such projects?
Challenger AI 3.0 focuses on artificial intelligence—a topic that has been among the hottest in recent years. Some worry that AI will replace humans, while others look for ways to adopt these technologies without falling behind. Regardless of your position, it’s useful to form a realistic assessment of business prospects:
- Does it make sense to develop an AI startup?
- Should this be done with Civitta, or would another accelerator be a better fit?
The first question can be informed by current venture capital statistics. According to CB Insights, by the end of Q3, startup funding activity remains on a “plateau.” Both the number of deals (20,000) and the total funding ($184 billion) are far from the frenzied levels seen in 2021.
At the same time, this stage of the market allows investors to enter at reasonable valuations, without overpaying for potential. It enables a meaningful dialogue between startup founders and venture funds, as investors are not forced to “buy blindly” anything and everything before prices rise further. Currently, they set higher standards for project quality and team capability. Investors have the time to carefully evaluate and choose, rather than investing “on hype” in any venture simply because its name includes the coveted “.ai” domain.
Therefore, investing in team development and having the opportunity to refine the business component through mentoring sessions becomes particularly valuable under the current conditions. Back in 2021, startups could focus more on marketing, leveraging a trending topic like healthcare with a polished presentation. Although the Key Cloud Index—which reflects startup valuations relative to their revenue—has started to rise in recent months, we are still far from a “bubble.” It is possible that in the spring, after the acceleration program concludes, the timing will be favorable for attracting investors on more advantageous terms than today.
And despite the overall low activity, CB Insights highlights the AI sector among others. According to Q3 results, this industry showed a skyrocket increase of 24% compared to the previous quarter in terms of deal volume, coming close to the peak level of Q1 2022.
And alongside what seems like continuous news about teams successfully raising resources, one cannot ignore the flip side of the coin. Could this be a case of survival bias, where we see the winners but fail to notice all the others? While for an accelerator this may be just statistics meant to provide roughly accurate results over large numbers, for each individual team, their project could be a once-in-a-lifetime endeavor.
And what if, in constantly comparing yourself to other startups—either indirectly or side by side at demo days—you end up losing something more important than just securing an investment round? Envy, anxiety, and FOMO (fear of missing out) have become defining features of today’s “fast” business world. If you feel these influences negatively affecting you, participating in accelerator programs may not be the right path—especially if your project aims for long-term, rather than trend-driven, value. Yet, where else can you sharpen your skills so effectively as in an active, competitive environment? “Screw it, just do it,” as Richard Branson said.
Now, the second question: Civitta or someone else? As mentioned earlier, the parent company of the group is based in Tallinn, along with its founders and a strong pool of mentors. Moreover, the Estonian Ministry of Foreign Affairs is directly involved in supporting Civitta’s programs. Essentially, this reflects the country’s position in the global startup ecosystem. While Ukraine alone may find it difficult to claim a significant role before the end of the war, cooperation with friendly countries presents opportunities here and now. Fortunately, most of Ukraine’s partner countries are also centers of the global startup industry. According to the latest research by StartupBlink, the following are in the world’s top 20:
Excluding the US, we can see fairly tight competition among other countries. Estonia has jumped two positions, securing a spot among the top dozen leaders based on the number, quality, and overall economic conditions of startups (the core criteria of the ranking). Interestingly, it has overtaken large European countries such as Italy, Spain, and Norway, and the competition is so close that it wouldn’t be surprising to see Estonia in the top ten soon.
What about artificial intelligence specifically? According to the StartupBlink ranking, Estonia ranks even higher—6th place. This suggests that, alongside pioneering companies like Skype, Bolt, and Wise, future AI unicorns are quite likely to emerge from Estonia as well.
Conclusions
As noted by Mind at the beginning of this review, this overview is not about where to invest money. Here, funding can be obtained, but alongside it come other intangible values. Therefore, the traditional risks we usually highlight in projects are not especially relevant here.
What could you lose by collaborating with an accelerator? Mainly time and confidence in yourself and your startup—if something doesn’t go as planned. On the other hand, the experience gained and the interactions with mentors and peers will not be wasted, even in the worst-case scenario.
Overall, the advantages clearly outweigh the possible drawbacks. We recommend that young businesses take advantage of such opportunities—whether through Civitta or other global programs—understanding that support is available, but it requires active effort on their part. It’s also useful to consider the timing of Demo Days in your startup’s development timeline, as these events provide a chance to present achieved results to investors.
