Swedish Defense Investor Jonas Rydin: Five Things to Know About Ukrainian Arms Development

• Rydin’s background and view of the state of play for Swedish defense investment in Ukraine

 A former military officer, Rydin started out in Swedish-Ukrainian IT with a Kyiv-headquartered company called Sigma Software Group. His work expanded to defense sector development in Sweden and Ukraine. He said his main business, currently, is raising funds and managing some 20 companies with an annual turnover of more than $1 billion. Of those firms, he said, six manufacture or deliver military-related services or goods like military shelters, medical kit, generators and training for customers like the Swedish Defense Ministry, other NATO states, and Ukraine’s Defense Ministry. 

In 2022 he founded the non-profit organization Quartermaster for Ukraine, which by 2025 had delivered $20 million to aid to the Armed Forces of Ukraine (AFU), including medical bags, tourniquets, field rations, drones and vehicles.

Rydin told Kyiv Post he sees substantial Swedish private and institutional investor interest in Ukraine and that the interest level has stayed high over time.

He said that Swedish capital is pushing to find ways to support Ukraine and that, in Sweden, there is a strong perception that there are both moral and national security grounds for Swedish wealth to be mobilized for Ukraine’s defense.

Public support of Ukraine is dissipating traditional Swedish reluctance to invest in defense-related businesses, he said.

Rydin: “With big investors it always has been that it is not right to invest in porn, tobacco, or war…Now I am seeing an attitude that investing in military (capacity for Ukraine) is the right thing to do.”

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• One important Ukrainian comparative advantage is fielding new tech

Rydin said that no military, including Sweden’s, can afford to ignore Ukrainian combat experience, but what is really unique about Ukraine’s war experience is fielding new tech on a modern battlefield and constantly upgrading it. He said that no military has ever had to field new technologies faster than the AFU. 

Rydin said that, in a conventional military supply paradigm, if a Ukrainian soldier needed a better piece of kit, the need, once perceived, would go to his commanders, then to the top of the Ukrainian army, then to the Defense Ministry, then to state contracting, and then, after terms of reference development and bidding, a contractor would be picked, and then to financing, and only after funding was disbursed, production of the needed item might begin.

The danger, he said, is that in modern war by the time the item reaches the soldier, it may already be obsolete. If a foreign state like Sweden becomes part of that process, the delay can be even longer, because the delivery process must also accommodate Swedish state contracting, Rydin said.

The Ukrainian approach – borne in part of necessity – has been to develop and field new tech at the ground level, which is faster and has a better chance of keeping new tech relevant, Rydin said.

Rydin: “One thing Ukraine can teach us….is that new (military) technologies can and must be introduced quickly…we must learn from that…how to do that.”

• Another big Ukrainian advantage is the humans involved - combat experience and work force

Rydin said that from an investor’s perspective the Ukrainian defense industry development has a world-class knowledge base because the country always had a strong technical educational infrastructure, and now the work force contains millions of potential employees with personal experience serving or assisting the military, who are willing to work at wages less than anywhere else in Europe. A significant percentage of them would likely be former service members with combat experience, he said.

Equally important, Rydin said, Ukrainian staff compared to some European nations’ staff have an excellent work ethic and, if hired into a stable job, will tend to commit themselves to career development within the company, rather than seeking the better employment terms elsewhere.

Rydin: “My experience is that I have seen no one work harder than Ukrainians…they are loyal workers.”

• The big hurdles for major investment in Ukraine’s defense sector is the outdated trope of Ukrainian corruption, and the business reality that major, quick profits aren’t possible.

Rydin said that Swedish private and institutional investors want to put capital into Ukraine but have a lingering concern the money might be stolen by local corruption. He said that, in his experience, pockets of corruption exist in Ukraine but the situation is far from the overwhelming problem it was 15 years ago.

Rydin said that Ukraine’s IT sector, for example, has worked profitably and on normal terms with the international IT sector since the later 2000s, and that Ukrainian manufacturing and agriculture became conventional players in European markets some time ago as well.

Ukrainian defense industry investment, although not without risk, he said, has the important advantage that it is difficult for a company to make false claims about a product to dupe an investor. An actual war in progress demonstrates to all what products work and fail, and information about that is widely shared, Rydin said.

The real barrier for major outside investment into Ukraine’s defense sector, Rydin said, is that quick profits are effectively impossible: small-scale investment and development is taking place on the ground level and run by actual combat units and volunteers not seeking to make money;  while large-scale development projects like a Ukraine-based ammunition factory face big up-front costs and deliver profit only over time and when scaled-up.

Rydin said he agreed with the suggestion that a major European arms manufacturer like Rheinmetall or Leonardo most likely would seek to use Ukrainian labor for final assembly, while manufacturing high-tech components outside the country. Profit would come from production spread over years and decades, for customers world-wide, he said.

Rydin: “At the end of the day, this isn’t rocket science...it’s a pretty well-tested business model.”

• Swedish state investment in Ukraine’s defense sector isn’t theoretical, it’s happening

Rydin said that state investment into Ukraine’s military sector is already happening, and that the government focus is on major weapons systems.

According to news reports, Sweden, on Thursday, announced it would donate to Ukraine’s military 18 Archer 155mm howitzers and five Saab-manufactured ARTHUR counter-battery radars, adding to eight systems already operated by the Armed Forces of Ukraine (AFU).

A high-tech weapon capable of burst firing three 90-kilo shells in 20 seconds, the BAE Systems Bofors-manufactured Archer is usually rated the most advanced cannon artillery fielded operated by either side in the Russo-Ukraine War.  Deliveries of the radar will take place in 2025 and the howitzers in 2026, an official statement.

Sweden also will join 14 other European states cooperating on development and production of artillery and artillery ammunition for member countries supporting Ukraine. Some Swedish funding could support in-Ukraine production of 155mm shells and a Kyiv-built howitzer, using a financing model pioneered by Denmark, the Swedish Defense Ministry statement said.

Rydin said that private capital most profitably should seek investment in Ukrainian military tech and skills outside the traditional heavy weapons template, particularly products or knowledge that could profitably be developed for delivery to other armies.

He named attack drones, cyber warfare kit and tactics, jamming and anti-jamming equipment, and individual soldier equipment as logical targets for that kind of investment.

Rydin: “The main thing is just to take a pragmatic approach.”