6 reasons to invest in Ukrainian startups – Vidak For Congress

For more than For three months, Ukraine has been shrouded in the flames of a war with Russia. That may seem like a red flag from an investor’s point of view, but all is not so black and white in the country’s tech sector.

Tech companies with Ukrainian roots and core markets in the US and Europe continue to operate uninterrupted after ensuring that their teams and data are completely safe abroad or in western Ukraine. Foreign embassies are also returning to Kiev, indicating that Ukraine’s capital may soon be safe enough for companies to reopen their offices.

IT companies have shown they are resilient and able to deliver on the biggest challenges. It is one of the many reasons that make Ukraine a successful hub for future unicorns.

Let’s take a look at six reasons to invest in tech startups from Ukraine.

They have proven that they are able to withstand a crisis

Ukraine’s IT sector has shown unprecedented resilience, flexibility and ability to withstand all circumstances during these war months. Having prepared contingency plans in advance, many tech companies quickly moved their teams to safety during the early days of the war or even before the fighting broke out.

Currently, many companies have spread their teams across offices in western Ukraine and abroad to ensure uninterrupted operations. They have minimized risk while maintaining discipline and access to the talent pool.

Most Ukrainian tech startups are still hiring

According to a survey by DOU, nearly 90% of IT specialists have seen no change in their job or workload since the start of the war. This indicates that Ukrainian IT companies have reliable pillows.

More importantly, they continue to hire talent to both support their business and help the economy. The IT sector is the third largest attractor of foreign exchange in the country’s economy, making the sector vital to economic stability.

As the development of the IT sector is an integral part of preserving the country’s GDP, the government fully supports it. For example, during the war, safe regions in western Ukraine turned into new hubs for IT companies.

Ukraine has an immense talent pool

Ukraine is one of the most popular centers for IT development. Here EPAM, Luxoft and other outsourcing giants have gathered a significant number of software engineers, business analysts and other technical specialists.

The number of IT specialists has also steadily increased over the past 10 years. For example, in the first half of 2021, the workforce of the 50 largest Ukrainian IT companies grew by 10,000 professionals. It is also home to tech startups that are leaders in their respective industries – Jiji, Taimi, Reface, MacPaw, and Headway, to name a few.

Startups are an integral part of creating a new layer of technology companies in Ukraine

Ukrainians want to return home, and some have already done so. Of the nearly 7 million Ukrainians who have crossed the border since the start of the war, 2 million have returned and more are on the way back. These people are showing that they are ready to work hard to rebuild the country.

Another thing to consider is that the world is supporting Ukraine economically and providing a necessary foundation for an economic recovery. Combine that with Ukrainians who want to do their best to live better in their country, and you get promising prospects for post-war development.

Today’s startups will become a foundation for a new layer of technology companies that will add significant value to the Ukrainian economy.

Ukraine is cost-efficient for building technology companies

Ukraine is one of the best countries for running a technology company because of its cost-efficient tax system for IT companies and the cost of living, according to research by Doing Business.

The country also has a strong educational infrastructure for the study of technology, mathematics, finance and economics. And due to the increased demand for IT specialists, many large companies are opening their own training centers and organizing internships. These trends are only gaining traction.

The whole world supports Ukraine

Ukraine has long been an underdog in Europe, lacking access to the capital it needed to be on par with its more developed neighbors. As a result, a series of bootstrap technology companies have grown rapidly with no outside capital.

This has helped founders be disciplined when allocating funds or scaling operations for their clients in other countries. The combination of such discipline and export-oriented product development is a flawless mix for sustainable growth. It also presents a strong opportunity that can be accelerated with investment.

At the same time, Ukraine’s international partners are providing the necessary resources for the country’s economic recovery, giving businesses even more potential for global growth. The EU is in full solidarity with Ukraine, not only by providing humanitarian, political and financial support to the population, but also by establishing a Ukraine Solidarity Trust Fund for the reconstruction of Ukraine after the war.

The current influx of international investment, a favorable tax regime and a strong talent base combined with the desire of the Ukrainian people to return to their homes make Ukrainian companies desirable investment goals.

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