The Current Wave: New breed of Ukrainian tech entrepreneurs seek success in global markets, Part 5

Under the radar:  New breed of Ukrainian tech entrepreneurs seek success in global markets (part 1)

Although enjoying a growing reputation as a global powerhouse for IT outsourcing and software development, Ukraine has a tech startup scene that is relatively unknown.  For years, young Ukrainian entrepreneurs have willingly traveled to Silicon Valley, Krakow, London, Dubai in search of funding and fertile markets.

Several major successful ventures have sparked the acquisition of Ukrainian-led startups by Western tech industry giants:

  • In 2012 Google’s Motorola Mobility acquired Viewdle, a mobile-focused facial recognition product company for a reported $30 to $45 million. The company had offices in both Ukraine and Silicon Valley.
  • In 2015, Snapchat acquired Looksery, an AR technology company, for $150 million in the largest acquisition of a Ukrainian tech startup to date.  The company had offices in Odessa, Ukraine, and San Francisco.  
  • Juniper Networks, an American company headquartered in Sunnyvale, California known for its networking products, acquired Cyphort in 2017 for more than $53 million. Cyphort was a cyber security firm founded by a team including the Ukrainian-born entrepreneur and angel investor Nick Bilogorskiy.  

The tally of Ukrainian startups operating beyond their national borders includes:  Readdle, Preply, Petcube, Grammarly, Augmented Pixels, YouTeam, MacPaw, and a steadily growing list of others. Most of these companies have been operating abroad for several years. Younger firms like Cargofy, Ecoisme and Hideez are closely following the trail blazed by earlier pioneers.

Ukrainian startups have products and services in a wide variety of sectors from productivity software to cybersecurity, edtech to energy management and e-marketing.  While many are software-driven in their product development, others include unique hardware offerings since the country graduates a significant number of both programmers and engineers.

Beyond their quest to join the ranks of Ukraine’s tech startup unicorns (such as GitLab and Grammarly), what is driving young Ukrainian millennial entrepreneurs to forsake a stable, secure job in IT outsourcing or third-party software development to build their own transnational companies from the ground up?  What are their key challenges and opportunities?  What have they learned from their failures and how many have eventually succeeded in their efforts and to what degree?

Starting from this month, we’ll offer a series of articles about Ukrainian tech entrepreneurs explores their motivations and dreams and also the many obstacles they face. The series will feature excerpts of interviews with executives from the major established startup players operating in global markets and also those who are just beginning.  Several of the interviews with these groundbreakers are posted online as podcasts.  You will read about the Ukrainian tech global pioneers, innovators and newcomers who are striving to shape new products and services worldwide.

This series offers the next generation of young entrepreneurs a window on the experiences of their tech colleagues, mentors and role models.  For others interested in gaining better insight into the Ukrainian tech startup scene, it provides a basic overview and clearly illustrates the steadily growing influence of this country’s tech entrepreneurs on the ever-evolving global markets.

For an overview of major deals involving Ukrainian or Ukrainian-founded startups, see the highlights in “The Dealbook of Ukraine”, 2018 edition.  Also, the 2018 study,  “Startup Investment & Innovation in Emerging Europe,” released by East-West Digital News offers background on the tech ecosystem in Ukraine and profiles of several startup players.  Part 4 of this report entitled, “Local Landscapes” can be found here.

In a 2017 UA TV interview, Ukraine-born entrepreneur, Silicon Valley angel investor and author Vitaly Golomb discussed the Ukrainian tech startup scene. And in another 2017 UA TV interview, Olga Afanasyeva, executive director of the Ukrainian Venture Capital and Private Equity Association (UVCA), talked about the organization’s efforts to acquaint investors with opportunities in Ukraine and to support and showcase local startups on the world stage.  

Topics: Analysis & opinion, International, Startups
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