Startup Ukraine: An Overview of its Upcoming Star Players

I recently spoke with a friend of mine working with Ukrainians. His opinion was somewhat reserved. In his exact words: “The trouble with our Ruski and Uke cousins is they are more money focused than relationship-focused.”

My friend is a respected American entrepreneur with Eastern European roots, so I gave his words some thought. Eventually, I had to disagree with him. What some people call con-like behavior might easily be the default chutzpah-type of behavior most Ukrainians display unconsciously. Young Ukrainians, at least those I know in person and those actively involved in the startup ecosystem, are meticulous, transparent, and understand the importance of trust. They also rave about having the name of their capital city spelled correctly. My friend Mykyta Tsylyuryk, a community manager at Lift99 in Kyiv, made sure that he corrected me at least five times in my urge to spell “Kyiv” as “Kyev.”

Ukraine experienced deep political turmoil just a few years ago that culminated in the Euro Maidan protests in Kyiv. The city still feels the effects of the bloody civil unrest, which was sparked in 2013 after President Yanukovych denied signing the Agreement of Stabilization and Association, a step ahead towards membership in the EU. Kyiv exploded with anger, given its predominantly pro-EU population.

The event touched the lives of literally every Ukrainian, and one of its consequences was the devaluation of the Ukrainian Hryvnia, which plunged the country into a recession. With a corrupted government barely able to pull its people out, Ukrainians had to fend for and reinvent themselves.

Some Ukrainians did it and they did it with a blast, using technology to accelerate the pace of innovation. Within a few years, several successful startup stories emerged and some of them gained international attention. Today, no less than three ride-hailing apps fight for dominion over Kyiv – Uber, Estonia’s Bolt, and homegrown Uklon.

Grammarly stands out as a renowned Ukrainian startup product (and one I am using right now to spellcheck this article). The company, which in October 2019 became a ‘unicorn’ after raising $90 million, is what Skype has been for Estonia: a magnetic pull that has attracted minds, venture capital, and the most valuable asset – attention, arriving from droves across other startup meccas across the world. Grammarly officially put Ukraine on the global startup map right at the opportune moment where working and living in the country became very affordable.

Another Ukrainian startup relatively unknown up until recently is now making the rounds and gaining international attention. Restream.io is a streaming platform where users can do live streaming on multiple platforms at the same time. The COVID-19 epidemic and resulting work from home phenomena acted as a real boost for anything that facilitates remote working, live streaming included. Streaming was already gaining ground even before the epidemic: on Facebook, one in five videos is now a live broadcast.

Restream’s success has been unprecedented. As per Ragnar Sass, the founder of Lift99 and one of the company’s investors, Restream has managed to double its key metrics over the past two months. It has ramped up over 1 million users and 41 million broadcasts on its platform, got accepted to Austin’s International Accelerator, and has recently secured venture capital financing over $5M from Austin’s Silverton Partners.

These examples are indicative of the broader growth of the ecosystem: Ukrainian startups raised $290 million in 2018, compared to $265 million in 2017 as per the Deal Book. That number crossed half a billion dollars in 2019. The ecosystem has proven itself to be quite dynamic–Estonia based Lift99 co-working space marked its first successful exit merely a year after it launched in Kyiv with the acquisition of Flawless app by Abstract. Other noteworthy exits include Snapchat’s acquisition of AI Factory, a deep fake image and video startup, and Blackstone’s acquisition of Murka, a Ukrainian-founded social casino game publisher.

Long known as a market to source offshore technical talent, the Ukrainian ecosystem is stepping up its game on its home soil.