Overview 2020: Ukrainian Tech Ecosystem

While 2020 has been a year of groundbreaking changes, the Ukrainian tech sector has demonstrated its proactivity, flexibility, continued job creation, great kicks off, and investment deals.

The State Statistics Service reports that IT helped save the day as Ukraine’s balance of trade in this area showed a $4.4 billion surplus. 

Let’s keep an eye on the key points of the Ukrainian tech ecosystem in 2020 – achievements, deals, initiatives, and more.

Global companies entered Ukraine in 2020

Several global giants entered Ukraine: Google, Apple, Reddit, Viber, La French Tech, Spotify

  • In January, Google officially has an R&D center in Ukraine, and a new direction was created based on CloudSimple – read
  • In February, Reddit opens an office in Kyiv and was looking for remote developers – read
  • In February, Rakuten Viber planned to open an R&D center in Kyiv and expand its existing office in Odesa – read
  • In April, Apple registered the Ukrainian legal entity – the Apple Ukraine limited liability company – read
  • In April, La French Tech announced the opening of an office in Kyiv – read
  • US-based franchising retailer Edible Arrangements, a business that creates treats and fruit bouquets from natural ingredients, opens an R&D office in Ukraine – read
  • In July, Spotify became available in Ukraine – read

Key investments

  • Ukrainian startup Restream raised $50 mln- read
  • Ukrainian startup Mobalytics raised the second round of $11,25 mln – read
  • Language learning marketplace Preply has raised $10 mln in funding – read
  • Ukrainian startup DMarket has raised a $6.5 mln round – read
  • Kyiv-based delivery service Zakaz raised €5 mln from Chernovetskyi Investment Group – read
  • Founded by Ukrainian Vlada Lotkina, startup ClassTag has raised $5 mln – read
  • The Ukrainian medicine search and delivery platform Liki24.com has raised $5 mln – read
  • Ukrainian startup AllRight, a global platform for English learning, raised $5 mln – read
  • Founded by Ukrainians rental service platform Rentberry raised $4,5 mln – read
  • Founders of monobank launched project Koto in the UK, investing $3.5 mln – read
  • Ukrainian adtech startup Influ2 secures $3.4 mln – read
  • The Seattle-based game publisher TinyBuild has invested $3 mln in Lviv-based game studio Hologryphread
  • Recognize Partners, a global technology investment platform, has made a significant strategic investment in Ciklum. – read

TOP investors and newbies on the VC market

  • Silicon Valley VC firm Andreessen Horowitz invested in 3 Ukrainian tech companies (total amount of investment $73 mln): US-Ukrainian startup Very Good Security raises $60 mln Series C funding, Allset raised $8.25 mln Series B, deep tech entertainment startup Reface raised a $5.5 mln seed round 
  • Ukrainian VC firm SMRK, co-founded by Oleksandr Kosovan, invested in 4 Ukrainian companies: robotic startup Esper Bionics, startup Carbominer with technology able to capture CO2 directly from the open-air, booking app for trencher-man Allset, fashion-group Love&Live. The amount of the deals are not disclosed.
  • Ukrainian ICU Ventures invested in 3 companies: Respeecher startup, which specializes in creating a digital model of human voices, navigation technology company Augmented Pixels, and Edge-as-a-Service company Hivecell.
  • Ukrainian Genesis Investments, recognized as the most active investor in Ukrainian startups in 2019-2020 by the Ukraine Innovation Awards 2020, invested in 6 Ukrainian and 1 Lithuania tech companies (total rounds amount $12 mln): a global platform for English learning AllRight,  tech publisher Hacker Noon, mobile app developers an aggregated tool Adapty, VOCHI Video Editing application, Ukrainian podcast startup Elision, Lithuania-based AdTech startup RedTrack
  • Ukrainian investment company Quarter Partners has launched venture fund QPDigital, aiming to invest $100 mln in Ukrainian startups or international ones with Ukrainian roots. QPDigital specializes in early rounds of investments: from pre-seed to round A. The fund’s investment focus is on startups from the IT logistics, digital health, Game Dev, blockchain, and AI industries. QPDigital has already concluded 6 deals with a total investment of $ 2.6 mln. – read
  • NEFCO and Ukreximbank launch a new program of $10 mln for investing in green startups – read 

Mergers and Acquisitions

  • American Abstract acquires Ukrainian startup Flawless Appread
  • Ukrainian startup Jooble acquires job aggregator Hotworkread
  • Quarter Partners acquired a share in the WareTeka Digital Logistics Platform – read
  • Israeli-Ukrainian tech company Yael Acceptic acquires Kharkiv-based outstaffing company Agilitesread
  • Ukrainian LegalTech startup AXDRAFT acquired by the international company Onit – read
  • Grid Dynamics Holdings, Inc., a leader in enterprise-level digital transformation, announced it has acquired Daxx, a Netherlands-based software development, and technology consulting company that has engineering centers situated in major tech hubs across Ukraine (Kyiv, Kharkiv, Dnipro, Lviv) – read
  • Datagroup, Ukraine’s leading national fiber infrastructure and digital services provider, reached an agreement to purchase 100% of Volia, the leading cable broadband service provider in Ukraine – read

Ranking and Awards

Ukraine and Kyiv

  • Ukraine is in the top 30 globally and Kyiv has become a European hub according to Startup Ecosystem Rankings 2020 by StartupBlink – read
  • Ukraine with Grammarly is among the Europe Tech Factoriesread
  • According to Coursera‘s second edition of the Global Skills Index, Ukraine was ranked #4 in Technology globally – read
  • According to the Open Data Maturity Report 2020, Ukraine is ranked 17th. Ukraine performs above the EU average – read
  • Ukraine ranked 25th in the new version of the National Cyber Security Index 2020 (NCSI), published by the E-Governance Academy of Estonia among 160 countries – read
  • Ukraine is among the 50 most innovative economies of the world – read
  • Kyiv is now City #87 in the ranking of The Best Cities by Resonance Consultingread

Awards of Ukrainian companies and specialists

  • 21 companies from Ukraine among the world’s top 100 outsourcing service providers by the International Association of Outsourcing Professionals – read
  • 61 Ukrainian companies were shortlisted via Clutch 1000 – a list that encompasses leading companies around the world across a variety of service lines and industries – read
  • Polina Lishko, Ph.D., a Ukrainian-born physiologist at the University of California, Berkeley, has been chosen to receive a 2020 MacArthur “genius” award – read
  • Margarita Sivakova, CEO OF Legal Nodes, became the Winner of the European Women of Legal Tech Award 2020 in the Entrepreneurship Category – read
  • Anastasia Volkova, Ukrainian tech entrepreneur and agricultural innovator, were shortlisted at the BBC 100 Women 2020 – read
  • The Top Young IT Entrepreneurs of the Forbes Ukraine Under 30 2020 – read
  • The Kyiv Post announces the winners of the 2020 Top 30 Under 30 award, an annual prize that recognizes young Ukrainian achievers – tech entrepreneurs among young leaders: Artyom Kopanev, Genesis, Roman Mogylnyi, Reface App, Victoria Repa, BetterMe, Misha Rudominski, IT and aerospace entrepreneur – read
  • 6 new startups joined the Ukrainian Startups Wall of Fame by Lift99 Kyiv Hub: Lalafo, Liki24, Reface AI, 3DLOOK, Influ2, PromoRepublicread
  • Sigma Software won EGR B2B AWARDS 2020 recognizing companies that power the eGaming industry – read
  • Ukrainian startup 3DLOOK was shortlisted at the Pioneers of the new world by Sifted – read
  • MotionCam by Ukrainian startup Ajax Systems, wireless security systems producer, named “Intruder Product Of The Year” at the PSI Premier Awards 2020 – read
  • According to Sensor Tower, Ukrainian delivery service Raketa.ua has been ranked as TOP 10 the most downloaded EU apps in App Store and Google Play in 2020 – read
  • Ukrainian team from Chernigiv Meredot in the TOP 10 startups at Vestbee’s 5th edition of the CEE Startup Challenge – read
  • Ukrainian app Reface tops the App Store charts being ahead of TikTok and Netflix – read
  • Ukrainian IT company PowerCode developed a landing page for the World Health Organization (WHO) to help with regional monitoring community health protection on COVID-19 and was granted the Partnership for Sustainability award by United Nations Global Compact Network – read

Tech Hubs

  • Tech StartUp School, Lviv Polytechnic, businesses and municipality has launched the first Scientific park in Lviv region the SID City –  read
  • 2.5 hectares innovation park ITown is being built in Odesa – read
  • In July EIB provides a €50 million loan for a new innovation campus in UNIT.City –  read
  • The buyer of Kyiv’s Dnipro Hotel plans to invest $20 million to make it “the world’s first Esports Ready Hotel” – read
  • The first large-scale data center by Techiia holding worth 1 billion to be built in the Kherson region, Ukraine – read
  • In December Ajax Systems, a Ukrainian manufacturer of wireless security systems, opened the second plant in Kyiv. It is located on the Left Bank at 9 Boryspilska St., on the territory of the former Kyiv radio plant, and plans to create 1,000 new positions – read
  • Overview of the new coworking spots in Kyiv 2020 – read

Trade and international development

  • Ukrainian E-bikes Delfast Bikes keep on working with the police departments across Mexico delivering three TOP green models to patrol the historic center of Mexicali, Baja California. In February CEO of the company, Daniel Tonkopiy signed a contract with the police department in Mexicali – read
  • Ukrainian delivery service Raketa became an international company Rocket and launched the first spot in Nikosia, Cyprus. The next step is the Netherlands in 2021 and other countries. For already two years Raketa operates regular flights in 25 cities of Ukraine; a team of 200+ people; with partners are more than 3000 cafes, restaurants, bars, and shops – read
  • Liki24, a Ukraine-based e-commerce platform for medicine delivery, launched operations in Poland which was the first international market for ambitious European expansion plans – read
  • 3DLOOK, the technology of scanning the human body by photo using AI, neural networks, and 3D technology, opened an office in NYC. Also, the company has 2 R&D centers in Kyiv and Odesa – read
  • Ukrainian hypermarket goods delivery service Zakaz.ua kicks off in Uzbekistan. Previously service was launched in the capital of Moldova, Chisinau. In Ukraine, Zakaz.ua operates in 15 cities, particularly in Kyiv, Kharkiv, Dnipro, Odesa, and Lviv. At the beginning of 2020, Zakaz raised € 5M from Chernovetskyi Investment Group – read
  • According to the Ukrainian Israeli Innovation Summit overview, during the past three years, the collaboration between Ukraine and Israel in the IT-sphere has been taken to the next level: nearly 30 Israeli companies have opened their offices in Ukraine;  more than 50 Ukrainian technological companies have found new clients in Israel;  the turnover of Ukrainian IT services to Israeli companies have reached over $150 mln;  about 40% of its IT services Israel buys from Ukraine – read 

Government and The Ministry of Digital Transformation initiatives

  • Launching the Ukrainian Startup Fund: Ukrainian Government embarked on a new $18 million funding program for Ukrainian tech entrepreneurs. During 2020 USF has held 19 Pitch Days, received 2500+ applications, 80 Ukrainian startups have already received investments from $25000 to $50000, a total amount of grants 70+ MLN UAH – read
  • The Ministry of Digital Transformation announced 100 achievements of 2020. Key projects: Diia app and Portal, wide range of e-services, open data, nationwide digital education program, e-residency, Diia.City, IT-nation program, etc – read
  • The Ministry of Digital Transformation has launched a platform with data on the Ukrainian IT ecosystem-360 Tech Ecosystem Overview: an online portal for finding business information about IT companies, people, investors, and the entire technology ecosystem of Ukraine – read
  • Ukraine raises immigration quotas on IT specialists by 5,000 read. After the violation, dozens of Belarusian IT companies and at least 2,000 Belarusian workers have moved to Ukraine. Other companies moving employees include PandaDoc, Viber, and Gismart – read
  • Launching the Diia City – laws: The Parliament of Ukraine has registered draft laws for the development of the Ukrainian IT sector – №4303 “On Stimulating the Development of the Digital Economy in Ukraine” and №4305 “On Amendments to Criminal Legislation Concerning the Special Procedure for Investigating Criminal Offenses to ensure proper conditions for the development of the digital economy”. According to forecasts of dynamic development after the launch of Diia City by the end of 2025, by the end of 2025, the number of jobs in the IT industry will increase up to 450 thousand – read
  • GIG-employees are the new players in the Ukrainian IT-field. According to the draft law №4303, a new form of employment is becoming increasingly integrated into the Ukrainian legislation, which allows IT companies to enjoy truly flexible working conditions – read
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