If you’re actively involved in the startup scene, you would have probably heard a lot about Ukraine by now.
This is because the country is rapidly becoming a startup powerhouse that is driven by a highly robust education system and over 90,000 IT professionals actively serving a variety of global clients (and that number can easily be tripled if we start counting freelancers who aren’t officially registered).
Although the country was hampered by a weak economy and found itself in the middle of a cyber war between western democracies and Russia, cities like Odessa and Kiev have rapidly grown to become some of the hottest startup hubs in Europe.
Several multinational tech companies (like Oracle, Samsung, and Siemens) also operate more than 100 R&D centers across the country.
As a result, it’s safe to conclude that even when there is some instability in the region, the country’s IT sector will consistently remain stable.
What’s more, you can expect the technology industry to keep accelerating as salaries are significantly higher than average jobs in the local market. The industry is also boosting the economy as is has grown more than 50 times from 0.06% of the GDP to 3.3%.
Ukrainian startups boast an impressive track record
Even though access to capital has been significantly limited, Ukrainian startups have flourished because they focused on international markets right from the start. What’s more, startups also keep getting bought out by technology giants from overseas, highlighting the quality of innovation that exists in the country.
For example, the analytics startup Viewdle was bought by Google for about $30 million. Furthermore, augmented reality (AR) and mobile imaging company Looksery was purchased by Snapchat for $150 million.
None of this should come as a surprise as Ukraine has strong technology pedigree. In fact, you can say that it’s in the Ukrainian DNA!
For example, PayPal co-founder, Max Levchin and Jan Koum, the founder of WhatsApp are both Ukrainian and so is the co-inventor of WiFi, Alexander Galitsky.
Enterprise technology firms still dominate the economy
Although the startup scene is booming, enterprise technology firms continue to be one of the largest industries in Ukraine (and consistently maintains a significant impact on the developing economy). What’s more, a lot of companies that were once purely focused on an outsourcing business model have also started developing their own products (which they sell globally).
Many companies are also launching their operations in North America during the early stages of development (and continuing to maintain development back in Ukraine, long after the product has been launched).
Great examples of Ukrainian companies that have successfully achieved this are as follows:
But this doesn’t mean that Ukraine will stop being a hotbed for outsourcing IT operations, in fact, the country will keep attracting more business because of its price to cost ratio. Additionally, as more enterprises start embracing a nearshoring model, you can also expect more companies to outsource IT functions to Ukraine going forward.
As Ukraine’s locally incubated success stories start getting more attention across the planet, you can also expect more investors to start concentrating on this tech goldmine that is rapidly developing in this startup nation.
As a result, don’t be surprised if the next technology giant comes out of Ukraine!
Are you seeking a technology partner in the Ukraine? Get in touch!