By Tewfik Cassis
The Ukrainian startup scene is stronger than ever
despite multiple
currency devaluations, the loss of Crimea and the ongoing war
in
the east.
and Ukraine Digital News total venture investment in Ukrainian
startups
increased 237% year-over-year from 2014-2015, after having
dropped 56% between
2013-2014. Last year there were a number of
notable deals involving Ukrainian
startups, the most significant
being the acquisition of Looksery by Snapchat
for $150 million.
With over 400 universities and colleges, Ukraine
graduates around
15,000 IT professionals per year according to the recent
IT Ukraine industry
report. All large
Ukrainian cities are home to
coworking hubs and private IT schools that offer
mentorship and
courses taught by industry professionals.
Evgeniy Vyborov is a business mentor at one of the
coworking hubs
in Dnipro, Ukraine, and is a great illustration of the kind of
leaders
who are pushing the Ukrainian technology sector forward. Recently,
Vyborov served as a technical mentor with Boston Techstars and became
(a Ukrainian software development company) and
co-founder
market. With such a broad range of experience, Vyborov is one of the
emerging leaders who understand startups and remote software
development from
both the Ukrainian and US perspectives.
Over the past five years or so, according to Vyborov,
Ukrainian
outsourcing companies have developed a solid understanding of
the US
business environment and the US startup sector, and it’s
paying off. Though the
legal environment in Ukraine is still a challenge,
many companies are taking
legal concerns seriously and, as a result,
are winning the confidence of
western partners. Vyborov explains that
during due diligence, the legal
documents and business relationships
of US startups are scrutinized heavily by
potential investors and any red
flags, especially related to violation of
intellectual property, pose a severe
risk to raising money during the next
round.
Venture capitalists are understandably wary of
startups working with
remote teams, but that’s mainly due to concerns about
intellectual
property and valuation. If those concerns are allayed, then
working
with professional remote teams from Ukraine or elsewhere can offer
benefits
to a startup or small business, including access to a level of
developer
talent that’s hard for startups to attract (and afford) in the
states.
Vyborov explains that over the past several years US
companies
have increasingly been looking to Ukraine not just for cost savings —
as
in the past — but for quality and expertise. Top Ukrainian software
developers and specialists are constantly being recruited by top
international
firms. There are now over 100 research and development
centers in Ukraine, many
connected to well-known global players
including Boeing, Huawei, and Siemens.
This shift from cost to quality
is a trend across the Ukrainian IT industry,
and is a promising sign
for a country looking to build a brighter future as a
well-educated, technologically-driven society.
“Technological
advances born in Ukraine are having a profound impact
both on the world’s tech
scene and in the country’s own business, social,
and political life.” The
outsourcing industry in Ukraine is booming,
accounting for at least $2.5
billion in export revenue in 2015. The fruits
of this labor can be felt as far
off as Boston and Silicon Valley, where
startups as well as large corporations
are entrusting critical projects
to Ukrainian IT specialists. IT offers honest
work and a middle-class life
in a country where the average GDP per capita is
still only $3,900, and
where many workers make far less.
Ukraine still has work to do, but the future’s looking
bright for Ukraine’s
tech industry leaders. With thousands of new IT
specialists entering the
labor market each year, a Deep and Comprehensive Free
Trade
Agreement with the European Union, increasing fluency in English,
and a
booming outsourcing and R&D industry, Ukraine is bound
to attract more investment
with the promise of great returns for years
to come.
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