Those looking to invest in Ukraine need look no further than its tech industry.
The information technology industry, including telecoms, is one of the few in Ukraine that’s continually growing — there are major developments to report every year.
And since the last Independence Day, Ukraine’s tech has generated a lot of good news — from the 4G and Apple Pay rollouts, to Amazon buying the company with the largest office in Ukraine for a staggering $1 billion.
Here’s a list of the eight most notable tech successes and developments that have happened over the last year:
Roll-out of 4G
Ukraine’s three largest mobile operators — Kyivstar, Vodafone Ukraine, and lifecell — have started servicing the fourth generation of broadband cellular network technology, known as 4G for short.
The operators collectively paid Hr 8 billion, or around $300 million, for their 4G licenses at the beginning of 2018; and since April they’ve been offering the technology to people in Ukraine’s largest cities.
4G, which is about four times faster than 3G, affects all industries working on the internet, as people now use smartphones to pay for services, read news, or watch movies online more than they use desktop computers or even laptops.
In particular, faster mobile internet is allowing popular streaming services like Netflix and iTunes as well as online banking, taxi, gaming apps distributors to thrive in Ukraine.
Tech investment triples
The amount of investment in Ukrainian startups is up sharply on last year.
Local tech firms have raised $265 million over the last year, a sum three times higher than in 2016. On top of that, there were 41 undisclosed agreements, so the number is actually higher than that.
In total, 89 tech firms attracted money, with writing-enhancement software developer Grammarly leading — it got $110 million in February. BitFury, Petcube, and People.io were close behind.
And over the last five years, Ukrainian tech firms have attracted $600 million in investment.
$1 billion for Ring
U.S. e-commerce giant Amazon paid $1 billion for Ring, a startup that relies on Ukrainian experts.
Ring has its most important office in Ukraine, where it has hired 500 Ukrainians, the number that the company plans to double after Amazon made the purchase.
Using Ring’s technology, people can record live videos of their house entrances. The video is then wirelessly broadcast to the owners’ smartphones so they can greet and talk to visitors remotely. The built-in cameras can even assess the body language of anyone who approaches, and alert the homeowner if a caller’s actions look suspicious.
The technology was invented and prototyped by U.S. researcher Jamie Siminoff, but was developed mainly by Ukrainian experts. So it is a good sign for the local tech industry that companies like Amazon are calling for talks with Ukrainian developers.
Amazon is tight-lipped over the reason for the purchase, but it is reportedly expecting Ring to improve its parcel delivery service. Ring’s technology can allow postal workers, when approaching a house, to communicate with a receiver about delivery even when nobody’s home.
Until recently there was no competition for Ukraine’s largest bank PrivatBank in the area of internet banking. Its Privat24 is dominant, providing online banking services to at least nine million people. Now, however, Ukrainians have another option — Monobank.
Three former executives of same PrivatBank, after it was nationalized in 2016, co-founded Fintech Band, a company aiming to develop top-notch online services for different banks.
Their first project is Monobank, developed as a mobile-only plug-in bank for Universal Bank.
And although Universal Bank belongs to tycoon Sergei Tigipko, who has a mixed political reputation and was associated with the overthrown Ukrainian President Viktor Yanukovych, it’s generally a good thing for Ukraine — the more players on the fintech market, the better it will grow in the future.
Ukraine House Davos
Ukraine this year significantly increased its visibility on the international scene by opening its own conference sideline venue at the World Economic Forum, an annual gathering in January of the global elite — politicians, activists, and business executives — in Davos, Switzerland.
Called Ukraine House Davos, it mostly featured panel discussions on technology, business and investment, as well as blockchain, data science, and even cryptocurrency themes.
The organizer — the Ukrainian Venture Capital and Private Equity Association (UVCA) — sought to make Ukraine House Davos a mass advertisement for Ukraine as a technology partner. It was a success, with more than 5,000 investors, top executives, activists, politicians, and others visiting the venue during its five-day run on the sidelines of the forum.
Ukraine’s tech companies have conducted a record-breaking number of successful ICOs, which can be roughly described as public offerings traded for cryptocurrencies instead of fiat money.
There were 19 successful ICOs from Ukraine that resulted in companies raising $160 million. The three most successful at it were artificial intelligence developer Neuromation ($71 million), e-commerce companies DMarket ($19 million) and Propy ($15.5 million).
This — along with Ukraine having its own scientific crypto school and about 200,000 software developers and crypto-experienced engineers — has proved Ukraine is one of the world leaders in crypto-economy development, adopting the new technologies at the same time as more developed countries.
Android Pay & Apple Pay
Two U. S. tech giants, Apple and Google, brought to Ukraine their contactless payments systems, Google Pay and Apple Pay. The services are trendy in the West and are now available here.
Both services, the rollouts of which were considered long-awaited innovations for Ukraine, work by the user placing their phone or another compatible device next to a contactless payment terminal and making a payment without even having to have a bankcard on them. Users enter their credit and debit card details onto a device and use them to make payments online and in-store.
The services were first available only for PrivatBank clients. Now, however, Google Pay works with all of Ukraine’s banks. Apple Pay, in turn, entered Ukraine six months later and still supports only the cards of state-owned banks PrivatBank and Oshchadbank, and oligarch Sergiy Tigipko’s Universal Bank online subsidiary Monobank.
Lviv’s IT park
Ukraine’s tech community and several investors, including Canadian giant Brookfield, this year started building high-tech office space in Lviv to attract to and keep tech businesses in Ukraine.
Called Innovation District IT Park, it’s going to be a 10-hectare office park worth $150 million in downtown Lviv — an ambitious solution to reduce Ukraine’s brain drain within the tech community and at the same time to address a real estate squeeze in the country.
Intended specifically for IT firms and designed with programmers in mind, the park will contain impressive social infrastructure: in addition to 100,000 square meters of high-tech office space and 14,000 workplaces in eight office buildings, it will have sports and shopping sites, a kindergarten, and a university campus belonging to Ukrainian Catholic University for tech-related courses.