Ukraine’s tech talents are widely recognized: European and U.S. investors put their money into Ukrainian startups, while the global information technology behemoths like Google and Viber open their research and development centers here.
IT brings Ukraine $5 billion in exports annually, thus securing 3.5% of gross domestic product of the country. Meanwhile, the Ukrainian industry continues to grow.
Since last Independence Day, Ukraine’s government has continued to show how eager it is to help this industry grow even faster: It has created the new Ministry of Digital Transformation, fostered mobile operators to deploy the mobile internet more widely across the country and launched an app for government electronic services.
As Ukraine begins its 29th year of independence, it can take pride in its tech companies, which have attracted multimillion-dollar investments over the year, and its new startups that project the image of Ukraine as a tech nation.
Digital revolution
Launched in August 2019, Ukraine’s Ministry of Digital Transformation has already done a lot.
When 29-year-old Mykhailo Fedorov took over the ministry and invited tech specialists to be his aides, the local tech industry players seemed overjoyed — the government had finally started doing something in the tech field itself.
In February 2020, Fedorov’s team rolled out the mobile application Diia, which allows its 4 million users (as of June) to keep official documents in their smartphones: passports, driver’s licenses, student IDs.
Apart from the app, the ministry has also launched the Diia website to provide electronic government services — to register as a private entrepreneur or receive unemployment benefits — all online.
And Ukraine’s government now has a record number of people who previously worked in the IT industry and are trying to digitize Ukraine’s heavily bureaucratic system, which relies on paper documents.
The Digital Transformation Ministry, for example, has assigned tech advisors to Ukraine’s parliament and Cabinet of Ministers. The ministry also took control over the government’s incomplete and disordered registers to get rid of possible corruption schemes and protect citizens’ personal data stored there.
Digital reforms like these are potentially making Ukraine more attractive to global IT businesses and investors, though the country still lacks legislation allowing the industry to thrive.
Building startup culture
Ukraine, meanwhile, remains one of the best places to grow a new, innovative business, according to the global Startup Ecosystem report. The country ranked 29th out of 100 startup-friendly countries and Kyiv is among the top 10 European capitals for startups.
And many Ukraine-born tech businesses are highly valued abroad: Ukrainian startups attracted a record-breaking $544 million in investments in 2019.
Ukraine-founded software developer platform GitLab, for example, raised $268 million, while another unicorn — a startup worth over $1 billion — Grammarly attracted $90 million; People.ai received $60 million and online marketplace JiJi.ng raised $21 million.
In fact, Ukraine’s startups deliver even during the coronavirus pandemic. Ukrainian online gaming assistant Mobalytics raised $11.25 million in July and online tutoring platform Preply closed a $10 million funding round in March. Another Ukrainian-founded startup, Allset, which develops online services for restaurants in the U.S., raised $8.25 million, and real estate startup Rentberry raised $4.5 million in July.
This proves Ukraine’s tech potential globally.
This year, Ukraine tried to deepen its support of the tech industry on the domestic level by launching the $16-million Ukrainian Startup Fund, which grants up to $75,000 to promising startups.
4G in subway, rural area
Three major Ukrainian mobile carriers — Kyivstar, Vodafone Ukraine and lifecell — and Chinese tech giant Huawei have launched a 4G network in the Kyiv metro.
The carriers have invested $20 million to provide top quality mobile internet for 1.5 million people who use the metro every day and spend on average 60–120 minutes commuting on the subway.
The technical approach to providing mobile internet in the Kyiv metro is said to be one of the most advanced in the world, even though its launch was delayed for seven years due to bureaucracy and corruption, according to experts.
The Kyiv metro consists of 46 stations, but only 15 stations are connected to 4G as of August 2020. The government has set a goal to connect all the stations to the high-speed mobile data network by the end of 2020 and to provide the internet to 95% of Ukraine’s population, including on other public transportation, by 2024.
Offices of tech giants
Due to the vibrant IT industry and the pool of around 200,000 skilled tech specialists, many foreign businesses have their remote development teams in Ukraine.
Over the last year, companies like Google, Amazon-owned Ring and Bolt have opened new offices and R&D centers in Kyiv and Lviv.
U.S. tech giant Google, for example, houses its Ukrainian R&D in the building that used to belong to CloudSimple, a U.S. cloud technologies firm that Google acquired along with its Ukrainian office in November 2019.
Amazon-owned tech firm Ring, which develops smart home security systems set up its new office in Lviv, while Estonian transportation startup Bolt opened a new office and R&D center in Kyiv’s Unit.City, the Ukrainian innovation park for tech companies and startups.
Another U. S. tech giant, Apple, appears to be officially opening its first store in Ukraine. The company has registered its LLC at the IQ business center in Kyiv. However, Apple hasn’t officially confirmed its plans to work in Ukraine.
And Japanese tech firm Rakuten, which owns messaging app Viber, plans to open its R&D center in Kyiv, expanding on the company’s first location in Odesa, the Black Sea city some 600 kilometers south of Kyiv where the company has 120 employees. Roughly 97% of all Ukrainian smartphone owners use the app.
Tech pioneers
Ukrainian tech entrepreneurs also deliver groundbreaking innovations that lead the global and local markets.
Domestically, Ukraine’s film industry produced the first-ever movie using virtual reality technology and a high-speed camera robot. Directed by Ukrainian Vasyl Moskalenko, the comedy “Apple Man” was shot in front of 400-square-meter LED screens wrapped around the studio walls.
Globally, the technology was used by The Walt Disney Company, but no one has ever made a movie with virtual reality tech. For filmmakers, it is a discovery — now they can produce movies cheaper and faster.
Another Ukrainian startup, Dress-X, launched its first collection of digital clothes — 3D-rendered garments that are overlaid on the image of a person but do not exist in the real world. The concept may sound strange, but digital garments are already popular among Instagram influencers and models. The idea is not new — big designers like Fabricant and Carlings sell digital garments for thousands of dollars — but Dress-X is the first Ukrainian-founded startup to offer a cheap and ecological alternative to swanky, brand garments.
Another achievement on the global level for Ukraine: During the largest tech expo on the planet, CES2020, six Ukrainian startups exhibited their high-tech gadgets side-by-side with Amazon, Microsoft, Sony and Facebook.
