Article
Why Ukraine Holds a Big Tech Future in Spite of War
Author
Ivan Muts
Published
January 30, 2023
Time
10 mins to read
Table of Contents
Ukraine is known as an IT-outsourcing powerhouse, delivering solutions for clients from all over the world and exporting $6.8 billion of services a year, which is about 4% of the country’s GDP.
Being a digital country at the forefront of tech innovations is a somewhat lesser-known side of Ukraine. Examples of services like Diia, Monobank, Nova Poshta, and such startups as Grammarly, Ajax Systems, Gitlab, prove that Ukraine is not just a nation of brave people, but a strong tech country that can compete with more developed countries of the world.
But let’s not get ahead of ourselves and figure out why Ukraine is considered a strong tech hub.
How Ukraine emerged as a tech hub
The brutal war Russia has imposed on Ukraine creates many challenges for the country’s economy. For instance, the agriculture sector is one of the industries that suffer the most with approximately 34% of the total land area of Ukraine inaccessible.
Agribusiness, goods processing, and the Ukrainian IT industry are the top three export services of Ukraine. But the IT sector, compared to the first two that are being heavily affected during the war, comes somewhat undisturbed.
Two months on from the start of the invasion of Ukraine, the Ukrainian IT sector remains strong and an integral part of the country’s economy. In the first quarter of 2022, the IT industry has provided $2 billion in revenue, despite the war and forced relocation of businesses.
The Ukrainian IT industry continues to function and flourish with around 85% of the country’s tech sector fully operational, despite the ongoing active contribution of IT specialists to Ukraine’s victory. Almost 2% of IT professionals have joined the Armed Forces since the beginning of a full-scale invasion, and 5% of IT experts are being involved in state cybersecurity efforts and the support of critical infrastructure facilities.
Ukraine has emerged as a strong tech hub in Europe over the last few years. The last couple of years has seen the shift of the educational focus of our schools and universities to math and programming. With 285,000 developers in the country and almost 20,000 graduates every year from IT schools and universities, Ukraine became home to many remarkable tech startups.
With this article, we aim to prove that it is no coincidence. We will show that Ukraine, alongside a budding tech startup culture, has a long history of tech innovations and breakthrough digitalization initiatives that will help it not only win this war but quickly recover.
Ukraine’s digitalization initiatives and tech products
We collected a number of great Ukrainian services and Ukraine-based startups that might raise a few eyebrows in more developed countries and prove that Ukraine is a country of top tech talent.
Diia (“State and I”)
Diia is a Ukrainian e-governance app by the Digital Transformation Ministry that made Ukraine the first country in the world to launch digital passports that have the same legal status as paper equivalents and one of only four European countries with fully digital driving licenses.
It all started with the Ukrainian government creating a Ministry of digital transformation to enforce the country’s digital development. In February 2020, it launched an app called “Diia” that made more than 70 public services available online, including registering a business.
After its launch, two documents were accessible in the app – an electronic driver’s license and a technical passport but it was the generation of digital COVID vaccination certificates that boosted its adoption. By the end of 2021, Diia was used by 13 million Ukrainians (a third of Ukraine’s population).
Diia has also proved to be enormously efficient in wartime. Ukrainians can use digital documents on their smartphones for identification in lieu of paper ones. Ukrainian refugees can enter EU countries with them, even if they do not have paper equivalents.
Diia has also become a platform for donating costs for the military. Since February 24, Ukrainians have raised $5.6 million for the Armed Forces through the Diia app. Apart from that, citizens can report the movement of the russian troops, get a one-off payment as an aid in case of a job loss because of war, pay taxes, and even watch Ukrainian TV stream there.
Monobank
Monobank is a mobile-only neobank in Ukraine, one of the enablers that made Ukraine the fourth country worldwide in paying with mobile devices.
Monobank was launched in 2017 as a result of a collaboration between Universal Bank JSC and the Fintech Band, an IT consulting firm founded by former PryvatBank executives after the bank was nationalized in 2016. The idea behind this product was to give Ukrainians a positive impact on their spending capacity to stimulate the development of small and medium-sized businesses in Ukraine.
Monobank is a successful mobile bank with no brick-and-mortar locations, the same as Revolut, a London-based neobank, whose co-founder is a Ukrainian tech entrepreneur Vladyslav Yatsenko. The bank’s customer support can be reached via call centers or popular text messengers.
In order to use this service, one has to download the app, take a picture of one’s identification documents and pick up a card from the closest location or have it delivered. Along with eye-catching and playful marketing, the app offers many attractive banking services like free money transfers, cash backs, and the ability to pay utility bills with no commission.
Monobank was also one of the first banks to launch Apple Pay in Ukraine. By the end of 2021, the bank had almost 5 million clients.
Nova Poshta
Nova Poshta is a Ukrainian tech-driven express delivery company that increased the development of e-commerce in Ukraine.
Nova Poshta was founded in 2001 and since then has opened more than 9300 branches and 11000 parcel pick-up stations. It quickly became a pioneer in express deliveries offering its customers excellent service.
The company’s sorting center in Kyiv handles 520,000 parcels a day, which is the fastest in Ukraine. Nova Poshta has the ambition to make it the most powerful sorting center in Europe.
To offer customer-centric service, Nova Poshta has launched its mobile application that allows managing, tracking, paying for parcels, and more.
Nova Poshta is one of the 30 largest Ukrainian taxpayers and in 2019 paid $150 million in taxes. It continues to operate in wartime, delivering goods in all regions of Ukraine, unaffected by temporary occupation.
Ajax systems
Ukrainian developer and manufacturer of security systems Ajax Systems produces devices that protect more than 1 million users in more than 120 countries around the world.
Ajax Systems, a Ukrainian manufacturer of security systems with smart home capabilities was founded in 2011 by Aleksander Konotopsky. Since its inception, the company managed to raise over 10$ million in investments and produces one of the most high-tech products in the world.
Ajax offers wireless window and door opening sensors and movement sensors. In 2021 the company dominates the wireless segment of the market.
Since the start of the invasion with the support of Ministry of Digital Transformation of Ukraine, Ajax launched the Air Alert app that with a loud warning instantly informs about the beginning and end of a civil defence alert in the region.
Grammarly
Grammarly is Ukraine’s most famous startup that became a “unicorn company”, i.e. a privately held company that is valued at $1 billion or more.
Grammarly is an English grammar solution platform founded in 2009 by Max Lytvyn, Alex Shevchenko, and Dmytro Lider. Its initial goal was to help people communicate more effectively, checking English grammar and spelling.
Now, it is an English language digital writing tool that uses AI and advanced machine learning for grammar checking, spell checking, plagiarism detection, and style suggestions. They were recognized by TIME as one of the 100 most influential companies and Fast Company as one of the world’s most innovative AI companies. The company is currently valued at USD 13 billion and millions of users rely on their digital writing assistance daily.
Gitlab
Gitlab, a popular DevOps collaboration platform founded in Ukraine, helps teams improve cycle time from weeks to minutes, reduce development costs, and boost developer productivity.
This open-source code repository and a collaboration platform help to automate the process of writing code, its integration, and verification. Using this tool, teams can improve cycle time from weeks to minutes, reduce development costs, and boost developer productivity.
Gitlab was co-founded in 2014 by a Ukrainian Dmytro Zaporozhets, who became the richest software engineer in Ukraine, making a fortune of nearly $460 million. He is the second Ukrainian whose business went public in the U.S.
MacPaw
MacPaw, which develops software for macOS, iOS, Android, and Windows, is listed among the thirty best Ukrainian startups and has more than 30 million users worldwide.
MacPaw is the company behind the famous CleanMyMac app and was founded in 2008 in Kyiv. CleanMyMac is the company’s flagship product that keeps Macs clean, optimized, and malware-free. Other company products like Gemini Photos help users to declutter their photo libraries, or Setapp which gives access to a software library of 160+ ad-free, fully functional Mac apps for a single flat rate.
In 2019 Setapp was named one of the top 10 most innovative companies in Europe by Fast Company.
Petcube
Petcube is a world-renowned brand of interactive pet cameras that attracted more than $14 million of investments and sold hundreds of thousands of devices.
Petcube started as a startup in 2012 in Kyiv when Alexander Neskin created a device for his dog that stayed at home bored while he was at work. Then he launched a campaign on Kickstarter and raised $250k. Now Petcube is a WiFi camera that gives pet owners the ability to interact with their pets remotely using a mobile app. They can see, talk and play with their animal companions.
Petcube devices are sold in 18 countries of the world and have more than 100,000 owners.
DepositPhotos
DepositPhotos is a Ukraine-based content marketplace that provides over 231 million royalty-free stock photos, vector images, videos, music, and sound effects.
DepositPhotos was founded in 2009 by Dmitry Sergeev in Kyiv. In 2011 it attracted $3 million as an investment and a year later DepositPhotos was considered one of the fastest-growing photobanks in the world. Over the years the company has launched a few subsidiaries like Crello, a graphic online platform. In 2021, DepositPhotos with its subsidiaries was acquired by Vistaprint for a total price of $85 million.
Reface
Reface is a deep fake AI-based application that is the most recent Ukrainian startup that reached the top position on the iOS and Android platforms in their genre.
RefaceAI is a Ukrainian artificial intelligence company founded in 2015. Its app, Reface uses a technology called deep fake. According to its founders, the app took off because its technology is some of the quickest and most accurate on the market. The app uses the user’s biometric data to create videos swapping the faces of celebrities or movie characters with their own.
In 2020, Reface reached first place in the App Store across all categories in more than 100 countries.
Why Ukraine holds a big tech future in spite of war
The list that you have just read or scrolled through is not exhaustive. It includes only the most illustrative examples of technological solutions and products created in Ukraine for Ukrainians or founded in Ukraine and used all over the world.
It proves that Ukraine in its 30 years of independence while battling the Soviet legacy, has managed to rise as a country of remarkable tech talents. Despite having economic problems, Ukrainians have the immense grit and motivation to create exceptional tech products that win the hearts of millions. With digital passports, and providing more than 70 government services online, Ukraine has established itself as an e-government country.
But successful Ukrainian tech cases go beyond all that. We have hundreds of IT companies that are providing their software development services for world-renowned companies, and in that way, Ukrainians are directly involved in the launch of innovative tech products.
Here are a couple of reasons why Ukrainians are more than capable of creating outstanding IT solutions better than their competitors (in case you still need convincing):
- Strong expertise. Ukraine has a strong tech focus, and each year more and more students graduate with degrees in information technologies or related fields.
- Responsible. Even during wartime, Ukrainian specialists continue delivering top-notch development services to clients all over the world, because the feeling of responsibility is deeply integrated within us. We are diligent and hardworking, and our clients’ reviews confirm that.
- Ability to work under pressure. Ukrainians were submitting code from shelters during air raid alarms and Zoom-ing with students to read lectures from the trenches. If this does not prove “working under pressure” quality, we do not know what does.
- Dispersed talent pool. Ukraine has several cities in different parts of the country that are considered IT centers. Thus, the talent pool is dispersed and the risks concerning the sudden unavailability of teams can be averted.
- Resilient. Unfortunately (or fortunately), Ukrainians are no strangers when it comes to being flexible. In 2014 when russia first invaded our country and annexed Crimea, many Ukrainian businesses and IT companies started planning their operations taking into account unprecedented risks.
For instance, our company’s upper management plans yearly business operations with resiliency in mind, devising a few scenarios we can follow if we need to be flexible and adapt. This allowed us to react quickly, maintain all our operations, pay salaries, and even pledge to donate all 2022 company profits to help Ukraine fight and rebuild.
Instead of summing up
February 24, 2022, has changed the lives of the majority of Ukrainians as the full-scale invasion of our country started. Fortunately for the tech industry, most jobs can be done remotely. But as the country is fighting for its survival and the war takes a lot of means, it is crucial for the world to continue supporting Ukrainian products and Ukrainian business.
If you would like to help, consider partnering with a Ukrainian software company for your next project. Companies like Euristiq offer excellent service and deliver high-performing solutions that help our customers to stay on top of the market.
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