Ukrainian Tech Startups Carry On: How We Are Enduring The Invasion

My name is Oleksandr Yaroshenko. I am Ukrainian, Kyiv-borne, and I work on investor relations and strategy development for tech product startups with Ukrainian roots. Like many of my Ukrainian colleagues, I woke up on February 24, 2022, not to the alarm clock but to the sounds of bombing and air raid sirens. Russia had started a full-fledged war against my country, destroying our civilian districts, entire villages, and children and maternity hospitals.

Though my life and the lives of all Ukrainians have drastically changed, we all stay strong and fight for our country on various fronts — from military to informational and cybersecurity. And what is more, the majority of Ukrainian tech businesses keep on with their work.

In this article — I’m writing it between my apartment and a bomb shelter in Kyiv — I will tell you how my life and the lives of my Ukrainian colleagues have changed and how we manage to carry on business during these turbulent times.

The day that changed everything

For the last three years, I have been working at the largest startup ecosystem of Ukraine called Genesis. And for about a year, as a Head of Investor Relations, I have been fully focused on Headway, a global EdTech startup with Ukrainian roots, with the R&D department in Kyiv, and the recently opened office in London. 2021 was remarkably fruitful for our startup — Headway had x2 year-over-year growth, the number of paid subscribers of our app has increased three times, and our team grew more than twofold. We have been on a steep growth trajectory, starting a non-deal roadshow for investors and entering new markets while maintaining profitability.

On February 24, I was supposed to go to work, finalize our usual update on the financial model, and transfer the data into the pitch deck. After work, I planned to get a ride on the bicycle to prepare for the IronMan 70.3 this summer. But that day went totally different. Many people were talking about how Russia was ramping up its forces near the Ukrainian borders over the past several weeks, but nobody believed they would start bombing Ukraine. Therefore, the beginning of a full-scale invasion caught us all by surprise.

We kept on working and joined the fight

Headway developed a contingency plan prior to the Russian invasion, so the company helped our team with relocation to safer places. As for me, I stayed in Kyiv, a decision I made primarily because of my parents, who were against leaving their house in these uncertain times. My family bond is strong, and I realized that I wouldn’t be able to focus on work if I left them behind. The feeling of safety is quite relative in Kyiv, but I believe people can adapt and overcome nearly everything.

Just take a look at how my house is constantly transforming into a light fortress.

On the first day of the war, I managed to grab my work set up, including my laptop, two screens, and the mount for them. So now I can keep working comfortably, except that work is accompanied by the "soundtrack" of air raid sirens and explosions outside my window.

My colleagues were lucky to escape the great danger just in time, especially those who lived in small villages in the suburbs of Kyiv, where thousands of young families have settled in recent years. The Russians demolished nearly all the houses there, left people without food, water, heat, and connection, and killed some civilians on the streets. Fortunately, none of our team was there, and nobody was hurt.

Finally safe, our Ukrainian unit was divided and settled in different parts in the west of Ukraine and abroad. Some people were relocated in organized groups, some went to their relatives in locations without active hostilities, and others went abroad. We are now physically apart but act as one.

As soon as the company secured our safety, we all teamed up to resume our work to ensure business continuity and development. Readily-available emergency plans and established operations enabled Headway to conduct business as usual and fulfill previously set KPIs. From the first days, we created a collection of content about the war in a new format, which we were to launch later in 2022. This new type of content on hot topics generated a boost in users’ engagement in our app. So, it not only spreads the truth about current events but also has a positive impact on business and product metrics. Also, as a business, we have donated UAH 1M to support Ukraine.

Ukrainian tech companies don’t stop

The startup scene of Ukraine is underrepresented in the global arena, but Ukrainian IT talents are already well known and hunted by the world’s dominant tech players like Meta and Google. The IT industry is the third-largest category of foreign exchange earnings in Ukraine and has generated more than $6 billion in export revenue in 2021. There are some success stories, like the unicorn with Ukrainian roots — Grammarly, the viral face-wrap app — Reface, which has been famously tweeted by Elon Musk and Hollywood superstars, the security hardware company — formerly known as Ring purchased by Amazon for $1 billion, Jiji — a leading pan-African classified that conquered markets from OLX and my personal source of pride Headway — an EdTech company providing fun and easy educational content suiting busy adults’ lives.

Many of these startups became global IT companies with teams distributed across several countries but leveraging the access to tech talent and maintaining development R&D centers in cost-efficient cities of Ukraine. Having an R&D center in Ukraine has already become an “efficiency rule” for global tech companies. Wix with headquarters in Tel Aviv, JustAnswer with their head office in San Francisco, Ubisoft from Montreuil, and Gameloft from Paris are among them.

CEOs of these companies condemn the war, focusing on the security of their employees over the past few weeks. Many IT businesses in Ukraine established temporary offices in the west of Ukraine or started relocating their employees to EU countries. For example,MacPaw, a company developing Mac utility apps, ensured its infrastructure, user data, and cloud operation were outside Ukraine, their team was safe, and the business would operate uninterrupted. Ukrainian security systems company Ajax Systems is relocating not only its team but the whole factory to continue fulfilling its obligations to customers and partners. Even those companies whose employees stayed in Kyiv continue working, like Reface, turning from a fun face-swapping app into a tool of information resistance.

Now all Ukrainian IT companies are among the leading domestic financial guardians of Ukraine. They have already donated almost $25M to support the Ukrainian Armed forces and the whole country.

When even the war does not interfere with business results, the situation shows that Ukrainian businesses focused on international markets can be lucrative in terms of risk/return investment and, after the breakout of the war, can be considered even with the ESG-angle. I believe that in the upcoming weeks and months, more and more investors will try to approach our “tech gems” — Ukrainian startups. Moreover, a range of world-known investors has already expressed their stance supporting Ukraine.

The world stands united against the Russian aggression

Ukraine has clearly won the information side of the war. The world is watching a real representation of the ongoing events in my home state. According to Anders Åslund, this victory became possible primarily due to the vast presence of reporters from the leading world media who have been in Ukrainian cities starting from late 2021, allowing the reality to be truthfully depicted in news outlets free from “pro-Russian narratives.”

The international community reaffirms its support for democratic values and peace and continues givinggenerous donations to humanitarian, military, and infrastructure-rebuilding charity funds supporting Ukraine.

On the other hand, Russian affiliation is becoming a tremendous reputational risk for businesses. Therefore, more and more companies are cutting their ties with the aggressor state. Leaving Russia is a part of the necessary Environmental, Social and Corporate Governance (ESG) factors compliance and is simply a matter of ethics. Corporations are taking care of ESG, and investors are increasingly applying these non-financial factors as part of their analysis process to identify material risks and growth opportunities.

And in this case, I believe that the weights have significantly shifted to the ban of Russian ties sending this country ages back in its development.

“As an investor, you have to consider not just the company, but the environment in which they operate” — said Felix Boudreault, managing partner at research firm Sustainable Market Strategies in Montreal.

The balance should be restored in terms of investment for the sustainable future of Ukrainian companies. It's not only about donations but also abouttaking a closer look at the Ukrainian gems that can be considered part of the ESG mandate from the perspective of the investment funds.

Ukrainian unity and the world’s support will help Ukraine thrive

Though the life of each Ukrainian was separated into “before” and “after” the Russian invasion, the “after” doesn’t mean the devastation, decline, and stagnation of Ukraine. The unity and power of Ukrainians fighting against the enemy will indeed transform into unity and power for rebuilding the country and its rapid and steady development.

We’ve already seen such a tendency after the Revolution of Dignity in 2013-2014. It became a robust push for the flourishing of Ukrainian business in various sectors — from tech to hospitality — providing a lucrative risk/return ratio for investments. So, after the war, Ukraine will expectedly experience an even stronger boost for the future development of businesses and the economy.

As Ukraine has been brought to the spotlight, funds are being gathered to rebuild its cities and combat the humanitarian catastrophe taking place in a range of Ukrainian cities. Index Ventures, BlackRock, Mirova, Insight Partners, Flyer One Ventures, Atmos Ventures, and s16vc have also joined to support Ukrainian startups and IT specialists.

Donations from all over the world are flooding into Ukraine and already total hundreds of millions of dollars, ensuring everything will be restored after the war, and Ukrainian cities will return to everyday life with even more energy to overcome new daily challenges.

You can also support Ukraine via the following initiatives

1. National Bank of Ukraine Humanitarian aid to Ukraine: https://bank.gov.ua/en/about/humanitarian-aid-to-ukraine

   
   

2. You can find more international initiatives to help Ukraine and our people in tough conditions via this link: https://how-to-help-ukraine-now.super.site