WESTERN TECH COMPANIES, WHICH ENTERED THE UKRAINIAN IT MARKET DURING THE WAR
In the face of today's global challenges, war, and economic turmoil, Ukraine's IT sector continues to demonstrate its resilience and its important role in the country's economy. Despite the extraordinary circumstances, the sector is not only holding its own but is actively developing and remains a key player in the international arena.
Mobility and the ability to adapt quickly to new challenges make the IT industry an important pillar for Ukraine, both during the war and in the post-war recovery. Even in the face of full-scale aggression, the industry shows stable growth and demand in both domestic and foreign markets. This is a testament to the significant potential and ability to respond quickly to change that has attracted foreign IT companies to work with Ukraine for several years in a row.
Today we will take a closer look at the potential that the Ukrainian IT market can offer to European and Western companies in this difficult period of war. We will focus on the major technology players that have not only maintained their presence in the Ukrainian market but have decided to expand their operations despite the risks of war. Let's find out what motivated them to do so, and how this affects the prospects for further cooperation in the post-war years.
WHICH FOREIGN IT COMPANIES ENTERED THE UKRAINIAN MARKET DURING THE WAR?
Today, Ukraine needs support like never before. For decades, Ukrainian developers have built strong and close relationships with European and Western technology companies, creating an atmosphere of trust and support. And now that the time has come to support the Ukrainian economic front, most companies are doing all they can to help bring about a shared victory. Plarium, PwC, Oracle, UpWork, and many other foreign tech companies not only did not close their offices during the war but continued their operations in Ukraine while suspending their work in the Russian market. Setting up an office for research and development is often associated with high costs and risks if it is not done in Ukraine.
Glad to cooperate with Wirex
Wirex is a UK-licensed fintech company, whose product allows you to pay for goods and services with cryptocurrencies and traditional money. In February 2022, Wirex raised $15 million in investment to develop its business in Ukraine and opened a second R&D center in Lviv to expand its development team to create new fintech product features and expand its payment services to new markets.
All business processes at Wirex R&D are designed for remote working, so the company offers both full and semi-remote positions, with the ability to send work equipment to regions where this is possible. Wirex is an international product, with 4.5 million users worldwide, so the company is willing and able to offer projects to a large number of IT professionals from Ukraine, to develop faster and stimulate the growth of the economic sector.
Despite the war, the company is actively working with 250 Ukrainian developers on its products - Wirex App, a fintech application that allows you to pay for goods and services in cryptocurrency using Visa and Mastercard debit cards, automatically converting digital assets into euros and dollars. The company is also working on Wirex Wallet, a decentralized crypto wallet for storing DeFi and NFT tokens, among others.
In addition, Wirex has supported Ukrainians who are in Europe due to the war, providing access to the Wirex app without restrictions and issuing physical Wirex cards that allow them to pay for goods and services using cryptocurrencies and traditional money. Previously, such product functionality was only available to EU citizens. To use the wallet, you do not need to prove your identity or enter your passport details. Instead, you can use email, and to purchase cryptocurrencies, you need a bank card or Apple Pay and Google Pay services.
Ukraine is one of the top five countries in terms of cryptocurrency popularity. Therefore, we are confident that our product will make this market more accessible to Ukrainians, and cryptocurrencies will gradually enter our everyday lives along with traditional money,' said Ruslan Kolodyazhny, CTO of Wirex.
HEADING FOR VICTORY TOGETHER: OPENING R&D CENTERS OF ATLAS AND QUANTUM-SYSTEMS - LEADING DRONE DEVELOPMENT COMPANIES
The Latvian company Atlas, known for its drones, has opened a new R&D center in Ukraine. The opening is part of the company's strategy to expand its presence in the Ukrainian market and improve its products for military needs. At the same time, Atlas is also planning to open a manufacturing facility in Ukraine, but the final decision on when to start production is currently being postponed.
The company specializes in the production of drones such as the AtlasPRO and other models, including 'pocket' drones, designed for military operations. In particular, their drones are used by the Ukrainian military for reconnaissance and combat missions. More recently, the company has developed technology to significantly extend the endurance of drones using the AtlasTETHER system, which is capable of conducting continuous aerial reconnaissance.
In addition, Atlas has already delivered more than 200 units of its drones to Ukraine since December last year, and about 88% of the company's products are now sent to Kyiv in support of the armed forces.
The German company Quantum-Systems, which is opening a new research and development center, became a partner in this case. The main aim of the center is to develop and improve unmanned aerial systems (UAVs), with a focus on the Vector series of drones. The center will be based on the existing SSTLC service center, which trains operators and repairs drones. The new unit is expected to focus on combining software and hardware engineering.
The company already cooperates with the Ministry of Defense of Ukraine, supplying drones for the needs of the armed forces. In 2024, it is planned to start the production of spare parts for drones, and in 2025 - the full cycle of their assembly. Quantum Systems has also become a resident of the Ukrainian IT ecosystem Diya.City, which will help expand local production capacity and attract about 40 specialists in the initial stage of development of the R&D department.
These steps show that not only industry leaders, but also innovative companies recognize the potential and talent of the Ukrainian IT industry. Their initiatives can become an additional stimulus for the growth and development of the Ukrainian IT market and contribute to a mutually beneficial partnership with local companies and specialists.
LYFT – IS THE NEXT COMPANY THAT WILL ENTER THE UKRAINIAN SECTOR IN THE NEAR FUTURE
From recent news, it became known that the world's largest transportation company, Lyft, plans to open an R&D center in Kyiv with the possibility of joining Diya City. This will allow the company to do business in comfortable, understandable conditions and expand its presence in Ukraine. Currently, the IT sector in Ukraine is growing organically by 20-30% per year. However, after the launch of the Diya City project, the number of jobs is expected to increase to more than 450,000. The IT industry is also expected to grow from $6 billion to $16.5 billion by 2025.
Lyft is currently available to around 95% of the US population and also operates in Canada and Europe. Lyft's transportation network combines cars, bikes, scooters, and transit into one app.
Lyft is considered one of the largest transportation companies in the world today. Lyft is currently available to around 95% of the US population and also operates in Canada and Europe. The Lyft transportation network combines cars, bikes, scooters, and transit in one app.
Earlier this year, it sold its self-driving car division to Toyota for $550 million. They are currently recruiting a team of engineers for the Ukrainian R&D center. This is a cool opportunity for Ukrainian developers and engineers to work with Vice President Justin Moore, who was previously director of engineering at companies like Instagram and Facebook.
"Ukraine is one of the fastest growing IT markets in Europe. There are currently more than 220,000 IT professionals working in Ukraine. It was the talent of our engineers and the rapid digitalization of our country that contributed to Lyft's decision to open an R&D center in Ukraine. We are proud that such innovative companies as Lyft recognize the high quality of Ukrainian IT professionals and the highly developed IT sector. We want to see more and more technology companies coming to Ukraine. That is why we are launching Diya City - a special legal regime and one of the best tax regimes for IT in the world," said Mykhailo Fedorov.
"The Diya City special regime will make Ukraine an attractive country for doing business. Companies will get space for development and a low tax burden. In addition, such tax mechanisms will be beneficial for both Ukrainian and international IT companies. We will be glad to see Lyft among the residents of Diya City," added Oleksandr Bornyakov.
WHY UKRAINE IS THE BEST CHOICE FOR IT OUTSOURCING
The main advantages of Ukraine as a location for an IT department:
- A wide range of candidates. The IT market in Ukraine is developing rapidly. In 2020, there will be around 200,000 professionals working in the sector. The market is expected to grow by another 23% over the next 4 years.
- Special tax conditions. The vast majority of specialists are registered as sole proprietors. These IT specialists operate under a simplified tax regime, with a general rate of only 5%. This allows clients to save on administration and pay higher salaries for similar costs (in most countries, taxes are higher for this form of collaboration).
- Highly skilled professionals. Ukrainian IT specialists are ranked 5th among the best software developers (4th in Europe). Specialists are proficient in all major programming languages and rank 1st in the world in the number of Unity3D and C++ engineers.
- Digitization of services. Ukraine was the first to introduce electronic passports, which are legally equal to ordinary documents. There are plans to focus even more on digitalization in the future.
Other advantages include a good command of English, a favorable business climate, and the focus of Ukrainian developers on continuous development
PROSPECTS FOR THE IT SECTOR: POST-WAR INTEGRATION
According to many European and Western companies, the Ukrainian IT sector has significant development prospects in the post-war recovery period. Foreign investors are already paying attention to the services that have been introduced at the state level, and this is only the beginning. One of the most striking examples is the interest of international financial institutions in digital tools that allow them to control the targeted use of financial resources. This is extremely important in the context of significant international aid and investment flows aimed at rebuilding the country's infrastructure and economy.
At the same time, international organizations and private companies are interested in commercial products developed by Ukrainian developers. The military technology sector, where Ukrainian companies develop defense technologies and software for the financial and banking industries, is actively developing. Equally important are developments in process automation in various industries: logistics, transport, agriculture, and manufacturing. This demonstrates the wide range of opportunities that the Ukrainian IT sector can offer the international market, both now and in the future.
As the country recovers from war, the latest technologies will be in high demand to help speed up construction processes and improve the quality of infrastructure projects. Innovative solutions that help to automate and optimize construction will contribute to the large-scale reconstruction of Ukraine and create new opportunities for business and technology development.
Another key factor in the development of the Ukrainian IT sector is European integration. The process of Ukraine's rapprochement with the EU has great potential to strengthen the IT industry and communications both in Ukraine and across Europe. The benefits of European integration include the elimination of customs and tax barriers.
Integration will also open up new opportunities for the development of education, which will raise the level of training of future IT specialists.
In addition, Ukraine has every chance of becoming one of the key centers for the development and provision of IT services in Europe, given the high level of qualification of Ukrainian specialists and competitive prices. This will allow Ukraine to compete in the international market by offering high-quality IT services at affordable prices.
After joining the EU, the Ukrainian IT sector will be able to actively participate in the development of the EU economy, which in turn will lead to the creation of new jobs and provide a significant boost to the national economy. Thus, integration into the European Union will open new horizons for Ukraine and help strengthen its position in the global IT market.
CONCLUSION
The world was shocked by the events of late February 2022, when a full-scale war broke out in Ukraine. Many countries and international experts expected the Ukrainian economy to fall into a deep crisis and recession. However, to everyone's surprise, some Ukrainian industries, and in particular the information technology sector, have shown exceptional resilience. This sector has not only continued to function but has become an important economic pillar of the country during one of the most difficult periods in its history.
Ukraine's IT sector is by far the most stable and the only one that has shown growth despite all the difficulties. Its share of Ukraine's services exports was an impressive 46%, underlining the importance of this industry to the economy. This resilience and ability to develop under wartime conditions testifies to the high level of professionalism and adaptability of Ukrainian IT specialists.
The modern world community observes with respect and admiration the Ukrainian people, who have shown amazing strength and resilience in the face of enormous challenges.
Ukraine has chosen its partners in the international arena with great responsibility, and today, when conditions have become even more difficult, our partners are helping us to persevere, providing jobs and strengthening the economy through strong relationships
