For greater than three months, Ukraine has been engulfed within the flames of a battle with Russia. That may appear to be a pink flag from an investor’s perspective, however all the things shouldn’t be so black and white within the nation’s tech sector.
Tech corporations with Ukrainian roots and core markets within the U.S. and Europe proceed to function uninterrupted after ensuring their groups and knowledge are fully protected overseas or within the west of Ukraine. Additionally, overseas embassies are returning to Kyiv, indicating that Ukraine’s capital may quickly be protected sufficient for corporations to reopen workplaces.
IT corporations have demonstrated their resilience and talent to ship outcomes amid the worst of challenges. It’s one among many causes that make Ukraine a profitable hub for future unicorns.
Let’s take a look at six causes to put money into tech startups that hail from Ukraine.
They’ve confirmed their potential to resist a disaster
The Ukrainian IT sector has proven unprecedented resilience, flexibility and talent to resist any situations throughout these months of battle. Having ready emergency plans upfront, many tech corporations shortly relocated their groups to security in the course of the first days of the battle and even earlier than the combating broke out.
At the moment, many corporations have unfold their groups between workplaces within the west of Ukraine and overseas to make sure operations proceed uninterrupted. They’ve minimized threat whereas sustaining self-discipline and entry to the expertise pool.
The vast majority of Ukrainian tech startups are nonetheless hiring
Almost 90% of IT specialists haven’t seen any adjustments to their job or workload because the battle started, in keeping with a survey by DOU. This means that Ukrainian IT corporations have dependable cushions.
Extra importantly, they proceed to rent expertise each to help their enterprise and assist the financial system. The IT sector is the third-largest attractor of overseas forex into the financial system within the nation, which makes the sector important for financial stability.
As the event of the IT sector is integral to the upkeep of the nation’s GDP, the federal government totally helps it. For instance, in the course of the battle, protected areas within the west of Ukraine become new hubs for IT corporations.
Ukraine has an immense expertise pool
Ukraine is without doubt one of the hottest facilities for the event of IT. It’s the place EPAM, Luxoft and different outsourcing giants have gathered a big variety of software program engineers, enterprise analysts and different technical specialists.
The variety of IT specialists has additionally elevated steadily within the final 10 years. For instance, within the first half of 2021, the 50 largest Ukrainian IT corporations grew their headcounts by 10,000 professionals. It’s additionally house to tech startups which are main of their respective sectors — Jiji, Reface, MacPaw and Headway, to call a couple of.
Startups are integral for creating a brand new layer of tech corporations in Ukraine
Ukrainians wish to return house, and a few have already carried out so. Of the practically 7 million Ukrainians who had crossed the border because the begin of the battle, 2 million have returned, and extra are on the best way again. These individuals are displaying they’re able to work exhausting to rebuild the nation.
One other factor to think about is that the world is supporting Ukraine economically, offering a obligatory useful resource base for an financial rebound. Mix that with Ukrainians prepared to do their greatest to stay higher of their nation, and also you get very promising prospects for post-war growth.
Immediately’s startups will change into a basis for a brand new layer of know-how corporations that can add important worth to the Ukrainian financial system.
Ukraine is cost-efficient for constructing tech corporations
Ukraine is without doubt one of the greatest international locations for operating a tech enterprise attributable to its cost-efficient tax regime for IT corporations and cost of living, per analysis by Doing Business.
The nation additionally has a robust instructional infrastructure for the examine of tech, arithmetic, finance and economics. And because of the elevated demand for IT specialists, many massive corporations are opening their very own instructional facilities and organizing internships. These traits are solely gaining momentum.
The whole world is supporting Ukraine
Ukraine has been an underdog in Europe for a very long time, and it lacked entry to the capital it wanted to get on par with its extra developed neighbors. Because of this, an array of bootstrapped tech corporations have been rising quickly with out exterior capital.
This has helped founders change into disciplined when allocating funds or scaling operations for his or her prospects in different international locations. The mix of such self-discipline and export-oriented product growth is a fail-proof combine for sustainable development. It additionally provides a robust alternative that may be accelerated with funding.
On the similar time, Ukraine’s worldwide companions are offering obligatory sources for the nation’s financial rebound, so corporations can have much more potential for international development. The EU is standing in full solidarity with Ukraine not solely by offering its folks with humanitarian, political and monetary help, but in addition by establishing a Ukraine Solidarity Belief Fund for rebuilding Ukraine after the battle.
The present influx of worldwide investments, a positive tax regime and a robust expertise basis mixed with the Ukrainian folks’s want to come back again to their house makes Ukrainian corporations fascinating funding targets.
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