The beginning of the year is always a good time to remember all the memorable events from the previous year; good memories of the past help us see our bright future more clearly. Some really important things happened inside the Ukrainian IT market in 2015. Let’s remember what interesting things happened last year in the Ukrainian tech sector and imagine what could happen with us in 2016.
Internet media “Economichna Pravda” has prepared a review of the most notable tech events of the Ukrainian tech market in general, and particularly Ukrainian IT companies.
1. 3G Launched in Ukraine.
The three main Ukrainian mobile operators – Kyivstar, Life:), and Vodafone (former MTS), finally purchased 3G frequencies for their networks and launched their 3G networks over summer-autumn 2015. Together they have paid almost 8.7 bln hryvnias just to get the required licenses. It’s also important to mention that they have stated to invest the same amount of money into the development of 3G networks.
According to Peter Chernyshev, CEO of Kyivstar, the 3G launch was the most expensive investment project in the Ukrainian IT market in 2015. This event should give the green light to other development of new tech services.
2. Snapchat bought the Ukrainian startup Looksery for $150 mln.
Looksery is a mobile app that uses its facial tracking and modification technologies to transform a user’s face in real-time with a range of facial filters. With such filters a user can modify facial features, such as make a face look younger, fuller or thinner, change the color of the eyes and skin, add or remove wrinkles, and transform all these into a 3D animated avatar instantly.
The startup was founded and located in Odesa, but later most members of the team moved to the San Francisco Bay Area. In September 2015, Snapchat bought Looksery for $150 mln. This seems to be a record for the Ukrainian startup market.
Andrey Kolodyuk, Founder and Managing Partner at AVentures Capital, says that this buyout is a good example of how you can build a company in just two years that is worth millions of dollars.
3. Ukrainian startups received almost $100 mln of investments.
Over the last year Ukrainian tech startups received a record number of investments. According to Denis Dovgopoliy, Co-founder and Manager Partner of the business accelerator GrowthUP – “The number of investments are evaluated from $60 mln to $100 mln. That is a record for the industry. It has become a reality because of an unpredicted number of deals.”
But according to Jaanika Merilo, currently Innovations Director in Lviv, the Ukrainian market for early investments is still weak and not highly developed. For example, the amount of investments into startups in Estonia was €4.8 mln. So if we Comparing Ukraine and Estonia in terms to the number of population, the number of investments into Ukrainian startups should be around €155 mln.
4. IT is 3# in the Ukrainian export sector.
The Ukrainian IT market is one the most important state industries with an export volume of $2.4 bln in 2015 and it is 3# in the Ukrainian export sector (first two places are taken by agriculture and metallurgy industries). The Ukrainian IT market showed 10% growth in dollar terms when compared to the previous year.
According to High Tech Report, the US market is the main export destination with an estimated 80% of the total volume of export services.
5. The Ukrainian government is keeping good working conditions for IT companies.
Most IT executives positively assess the facts that the state authorities have kept good economic and working conditions for Ukrainian IT companies in 2015. IT organizations expect that these conditions won’t be changed in 2016 or at least will be changed insensibly.
Also, it’s important to mention that the tax regulations have remained the same with a single income tax for all IT specialists.
6. Educational platforms launched free online courses.
Alexander Kardakov, General Director of Datagroup, notices the intensive development of free online trainings and courses in the field of high technologies – “Nowadays it’s easier to get new skills and knowledge with the help of several online educational platforms, all-Ukrainian educational programs and free online courses from leading Ukrainian universities”.
We have mentioned earlier that the educational foundation BrainBasket has launched the educational program Technology Nation that should teach 40K Ukrainians to code during 2016 and 2017.
7. The share of IT in Ukrainian GDP exceeded 3%.
As mentioned above, the total volume of IT services was $2.4 bln and that generated more than 3% of the Ukrainian GDP. In 2012 that figure was only 0.8%. According to economic forecasts, the share of the IT sector in the GDP could increase up to 5.7% by 2020.
8. E-government launched in some institutions.
Last spring ProZorro, a revolutionary electronic system of government procurement, was launched. This system eliminates the possibility of corruption in this area. According to such reports, ProZorro has already saved Ukrainians almost 0.5 bln UAH since it was launched.
Also a team of IT volunteers with the government’s support created the web portal iGov.org.ua where government services can be provided online. The founders of the project would like to gather all the state services that public authorities provide to the citizens and businesses.