"I found out that I have friends in Ukraine."
Translation:Я дізналася, що у мене є друзі в Україні.
I know about the -у/-в interchange and know that -в would be the usual choice for a native Ukrainian speaker here so as to flow better. But isnt -у technically not correct too?
I assume you mean for the в Україні and not у мене є, then yes although it doesn't really flow too well.
"Technically" it's correct. I can't explain why :)
For example, in Italian for the same purposes of "flow" and aesthetics, one says "e tu" but "ed io", and "e io" is incorrect. However, in Ukrainian the у/в and і/й/та and many others are not "compulsory" and are considered interchangeable. Depending on what you're currently learning in a high school, a teacher may or may not subtract points for using "в" rather than "у" and vice versa in some sentence :)