Four worthy tech companies from Ukraine and how they did It
This month online service Grammarly has raised 110 million dollars. It is the biggest record level of investment for the Ukrainian company and a sign that Ukrainian projects continue to conquer the global tech world. According to the recent report “Ukraine Dealbook,“ the total venture investments in Ukrainian startups increased 237% year-over-year from 2014-2015, after having declined 56% between 2013-2014.
Besides Grammarly, Ukraine is also a homeland for other well-known projects that now boost the image of the country. Among them DepositPhotos, Looksery, MacPaw, Paymentwall, Readdle, InvisibleCRM, iBlazr and many others.
Grammarly is a web-based service that uses machine learning and artificial intelligence to scan the text for errors within a matter of seconds. «Built by linguists and language lovers» the service helps to improve the quality of the writing, starting from eliminating most common grammar and spelling mistakes and ending with much more complex check-up such as enhancing the tone of the written text and its effectiveness in the context of specific communication. According to company representatives, only in April of this year, Grammarly offered more than 14 billion improvements to users. And it is constantly evolving. In future, the service should be able even to determine if a particular joke is appropriate in a particular letter.
Grammarly was created in 2009 by Kyiv natives Max Lytvyn and Alex Shevchenko. At that point, the service was developed only for academic purposes, but later its co-founders changed their minds and decided to make it useful to anyone on the Internet who aims to make their writing flawless.
Two years ago Grammarly switched to a freemium model, since then its business is growing rapidly. Today the audience Grammarly’s reaches active 6,9 million users per day, and its application was downloaded more than 10 million times from the Chrome Web Store. Now Grammarly intends to use 110 million to accelerate its growth even more.
Despite the fact that the Headquarters of the Grammarly is now based San Francisco, most of its developers still work in Ukraine’s capital. Two years ago the co-founder of the project said in a comment to the Kyivpost that they have managed to develop such a service because they “started in Ukraine and found talented specialists” there.
Depositphotos is a Ukrainian company aimed to make a revolution in the global photobank industry. This online service works as an intermediary platform between sellers and buyers with a stock library of more than 60 million high-quality photos, videos, and vector images.
In 2009 a well-known entrepreneur Dmitry Sergeev sold his project DepositFiles and almost immediately founded a new company Depositphotos. In the beginning, it was a tiny project with two employees working in a small rented office area of 20 sqm. Today DepositFiles is one of the top-5 content platforms in the world with more than 47 million unique files and customers from 192 countries.
Several times Depositphotos was supported by investors. In 2011 it received 3 million dollars from the venture capital company TMT Investments. This round also brought the company another 4 million dollars from EBRD, that was a first investment of the international financial institution in the Ukraine’s IT sector. In 2016 TMT Investments sold a 7,1% stake in Depositphotos for 5,85 million dollars, that implies that the overall valuation of the Ukrainian company last year was approximately 82 million dollars.
Now Depositphotos calls itself a competitor of such giants of the industry as Shutterstock and Getty Images and Virgin Media, Macy’s, Job News USA, Yandex, TemplateMonster and United Printing among its clients.
Depositphotos is headquartered in New York, but its employees work all over the world. The development team and the largest number of specialists of the project are located in Kyiv. Once its founder Dmitry Sergeev told Kyivpost «Our heart is in Ukraine because it’s awesome here and there are so many talented people». Later he matched his words with action when he decided not to leave Ukraine after the proposal from Canada to move his business there.
Petcube is also successful start-up from Ukraine; it creates gadgets and mobile applications for pet owners. The first products of the technology company are an interactive camera Petcube Camera and mobile apps for iOS and Android. These products have brought pets and their owners closer with the help of built-in laser pointer and real-time video. Petcube allows pet owners to watch their pets, play with their pets remotely and even let their friends play with them.
The Petcube’s story started in 2013 with a small team of three people. That year Petcube got the largest amount of money ever collected by a Ukrainian startup at Kickstarter – 251 thousand dollars. This sum was 2,5 times higher than the initially planned 100 thousand dollars, which the startup managed to collect only in a week.
According to the Petcube’s co-founder and CEO Yaroslav Azhnyuk, the team achieved a lot just in a few years. «We have created a new category in the market – interactive camera for pets. Our sales have increased 5,5 times in 2016 – growth rates are not seen by Fitbit or GoPro in their first year», – he wrote in the post on his Facebook page.
Also, Petcube has already managed to attract 4 million USD of investments and get into the program of one of the world’s most powerful start-up incubator Y Combinator.
The Petcube sells their products in more than 2,500 stores in the US and Canada, and the company is entering the markets of Japan, Australia, and the European Union. Now Petcube is headquartered in San Francisco, California with offices in China and of course in Ukraine.
One of the most successful Ukrainian IT startups, MacPaw, was founded in 2008 by 27-old Kyiv native Оlexander Kosovan. The company develops software to improve the productivity of Apple’s computers. MacPaw’s app CleanMyMac takes first place in the list of best-selling applications for cleaning up MacBooks.
According to Kosovan, MacPaw wasn’t aimed to become a real business. It started with a team of three people and 3000 dollars of savings and inspiration in the «simplicity and beauty of Apple’s products».
Today MacPaw can justly be called the leader in its niche. Ukrainian developer offers ten products that are commanded by American and European experts. Its software products are used by millions of people in the U.S., Western Europe, and Asia, Apple recognizes it, and the biggest social network Facebook is among the clients of MacPaw.
Kosovan created and developed his project without any help from investors. Moreover, he launched his fund SMRK to support IT-startups. For example, in 2015 the fund invested 1 million dollars in the development of startup Ajax Systems.
MacPaw is registered in the U.S., but the central office with more than 80 employees, most of whom are Ukrainians, is based in Kyiv. It does not matter where the employee comes from, writes MacPaw’s founder in his article for Ukrainian media ain.ua, the most important criteria, are professionalism and ability to think outside the box.
UKRAINE – NEW TECHNOLOGY HUB?
Notably, that even after developing into world-known businesses Ukrainian startups don’t leave the country. Also, Ukrainian research and development centers are often the key innovators for many global companies such as Samsung, Boeing, Ericsson, ABBYY, UpWork, Siemens, Oracle, Wargaming, NetCracker, Ericsson, Huawei and many others. According to the IT Ukraine industry report that covers Ukrainian IT outsourcing and software R&D capacity, there are more than 100 R&D-centers of tech companies in Ukraine representing different sectors from telecom to e-commerce, from software to gaming.
Despite the conflict with Russia and political turbulence, Ukraine is already a thriving technology center with a #3 share of IT-services in its exports – about $2,5 – 3 billion yearly. Software R&D sector and IT service grow every year by double-digit figures. But what is the explanation of the popularity of Ukraine?
According to the freelance site Upwork (former Elance), Ukraine is the third best spot in the world to find specialists with advanced skills capable of undertaking complex projects. Ukraine, one of the best-educated countries in Europe, graduates about 15 thousand of IT professionals per year, says recent IT Ukraine industry report, released by Ukraine Digital News and AVentures Capital. For now, Ukraine has the highest number of IT specialists in Central Europe and the number of IT-companies in the country exceeds 1 000. Also, about 30 000 of Ukrainian IT professionals have international Brainbench Certificates that makes Ukraine the third country in the Top-50 countries with the largest number of certified IT-specialists.
Another advantage of Ukraine for businesses is the ability to utilize resources more efficiently. The average wage rate of the US-based developers is 50-250 dollars per hour comparing 30-100 dollars that charge developers from Eastern Europe. Moreover, these affordable prices are combined with a high-quality service.
The ease of communication can also be mentioned among the benefits of conducting research and development activities in Ukrainian cities as all of Ukrainian developers and PMs, have intermediate and higher level of English. Ukrainian IT-workers also demonstrate serious business approach and ensure smooth business operations, including punctuality, transparent project management, and fundamental task performance.
CAN UKRAINE BECOME THE NEXT SILICON VALLEY?
It is hard to tell. But this question has already been asked by Dailymail. Meanwhile, Forbes characterizes Ukraine as a new Tech Mecca, underlining the country’s base of talent and technology infrastructure and Huffingtonpost warns not to undervalue Ukraine’s technological advances and its impact on the global tech scene. Can they be right? You shouldn’t bet against it.