Over the past six years, the overall economic impact of the tech influx into the city of Lviv has grown to $1.4 billion from $734 million. During this time the number of tech companies in the city of Lviv has grown to 511, and the number of employees in the tech industry has exceeded 30 thousand. A new survey by Lviv IT Cluster conducted a thorough investigation that highlights how the income of tech people has changed over the last six years, how many jobs have been created by the IT industry in Lviv, and how it’s been affected by the Covid-19 pandemic, and this was published in its analytical report titled “IT Research 6.0”.
For the sixth year in a row, Lviv IT Cluster has conducted a large-scale survey, gathering and analyzing data into the most complete and up-to-date review of the Lviv’s IT market structure in order to gain insights. The survey has also expanded the research network into Ivano-Frankivsk’s IT sphere for the first time.
IT Research 6.0 reveals the most recent information on the dynamics of the tech industry, its economic impact, employee training, and IT professional profiles. The survey polled 1,200 employees working in the tech industry, including representatives of various professions and positions. Also, IT Research has also been studying the impact of the Covid-19 pandemic on Lviv’s IT industry for the last two years.
How the structure of the tech industry has changed over the past 6 years
The results indicate that the number of tech companies in Lviv is constantly growing over the past six years, rising to 511 in 2021 from 192 in 2015. In particular, 96 new businesses opened up in the city of Lviv and 68 have closed in 2021. Companies with 251 or more employees make up almost half of the current IT market.
Further, the number of tech professionals grew to 30 thousand from 13 thousand over the last six years. The average age of Lviv’s developers is around 29. The share of tech specialists (production /delivery) is 76%, non-tech specialists (non-production/non-delivery) – 24%. Among respondents, 92% were from Lviv, and 48% moved from other regions or countries. In the past 6 years, the median monthly salary of tech professionals in Lviv has increased from $1723 to $2102. Nearly 80% of respondents say their income level is higher than in 2020.
The main economic indicators over 6 years
Survey results indicate that the share of the IT industry in Lviv’s gross domestic product (GRP) was 20% over the last 6 years. The turnover of the tech industry is growing every year: from $280 million in 2015 to $895 million in 2020.
Results indicate that the overall economic impact has doubled in the last five years, from $734 million in 2015 to $1.4 billion in 2020.
The tech industry has created/maintained 73-74 thousand jobs, and each tech professional on an average generates almost three more jobs.
The total tax revenues from these tech industry activities was over 2 billion hryvnias from 2015 to 2020 whilst single tax revenues represented 38% of the total Lviv’s tax revenue in 2020.
How Covid-19 affects Lviv’s tech industry
Now in the second year of the pandemic, the market has adapted to the new reality. Businesses appear to be on an upward trend. 63% of surveyed companies are positive about engaging new employees and customers in 2020.
Also, the survey provides insights into tech industry’s attitude towards vaccination. 76% of surveyed people look at vaccination positively, and only 5% strongly oppose it. 67% of respondents have been fully vaccinated against Covid-19, most with CoronaVac vaccine (33%), in second place is Covishield/AstraZeneca (26%), and third is Pfizer (23%). 47% of surveyed people say they’ve been sick with Covid-19. 37% of respondents plan to return to the office in the future.
IT Research is carried out by Lviv IT Cluster, in partnership with Fama research agency. This years report is substantially more extensive than the five previous, for the first time covering both Lviv and Ivano-Frankivsk.
According to IT Research 6.0, there are 70 companies in Ivano-Frankivsk, where 2.6 thousand people work. 50% of Ivano-Frankivsk’s tech professionals work with companies in Lviv. The median salary in Ivano-Frankivsk is $1339. A large share of the market is occupied by young tech professionals who have been working for about a year (28%), a quarter of the respondents are working in the tech industry for 1-3 years, and another quarter for 3-6 years.
Learn more about the most important tech trends of Ivano-Frankivsk and Lviv, migration mood of IT professionals, reasons for dismissal, education and attitudes towards Diia.City in our IT Research 6.0, which can be downloaded from this link.
This year Ukraine has crossed the 30-year milestone of Independence. We are a young age state but have made big progress in business and industry development. Ukraine has a powerful tech industry, which is constantly evolving, bringing new products and services that are highly valuable and making people’s lives better to the market. On the occasion of the 30th anniversary of Ukraine’s Independence, we have picked out three dozen bright and promising Ukrainian startups. Looking for the most innovative startups we teamed up with Michael Puzrakov, Executive Chairman & COO at Intellias, President at Lviv Tech Angels, who helped us select and evaluate startups from the expert viewpoint.
“For 30 years of Ukraine’s Independence, the Ukrainian technology industry has run a long way of growing, facing educational, tech and human resources challenges. Beginning mostly with service companies, the tech market nowadays is well represented by both service and product companies. Ukraine has become a powerful technological hub in Eastern Europe. We have a full-fledged tech industry with an increasing number of high-tech, complex products and services. Today let us look at 30 Ukrainian startups that are making our history. They are the brightest tech-related projects of Ukrainian origin that beat competitors in global markets, are worldwide used, and known as “made in Ukraine”, shares Michael Puzrakov.
Today, we want to draw your attention to the stories of these projects and the incredible people who created them. All startups, large and small, go through five stages of development, which are inevitable on the way to building a successful business. Going through the stages of a startup, from the emergence of great business ideas to running a sustainable business, is like moving up the levels in a video game. Only when the previous stages of startup development are completed will you be able to move on to the next ones. And as in video games, to continue moving forward, you need to become more experienced, think strategically and plan ahead. Top startups with Ukrainian roots in the stage of sustainable business include Gitlab, Grammarly, Ajax Systems, People.ai, Restream and lots more. Let’s go deeper into the startup success stories.
How to make hundreds of millions of dollars in revenue by offering tools for software developers with every single employee working from home? It’s a classic story: tech company goes to Silicon Valley incubator, represents its plan, and grows explosively. At the very start, GitLab had several workers, fully remote and today it’s more than a thousand employees in 45 countries, using video calls and Slack chats to stay in touch. Zaporozhets’ and Sijbrandij’s startup expanded dramatically, placing GitLab on the top list of the skyrocketing companies for its revenue growth.
In 2009, Ukrainians Maksym Lytvyn, Oleksiy Shevchenko and Dmytro Lider founded an online grammar checker based on an artificial intelligence system that knows English very well. At the heart of Grammarly’s success is a simple idea – too many people use written English and almost no one’s skills are ideal. Grammarly is one of four unicorn startups, among companies with Ukrainian roots, valued at more than $1 billion. The number of Grammarly’s customers reaches 30 million people every day. According to Dmytro Lider, their current goal is to make Grammarly available wherever written communication in English can take place.
How to break through the world market of thousands of security systems? Greatly influenced by a business trip to China Oleksandr Konotopskyi decided to create a smart wireless security system that will replace the faceless “white boxes” on the walls. That’s how Ajax Systems came about. Now Oleksandr manages an international multimillion-dollar business and proves to the whole world that the Ukrainian product can overtake even the most ardent manufacturers with a world name.
In 2017, a Ukrainian company Petcube raised $10 million in investment in round A. The company provides a unique solution for pet owners for entertaining their cats and dogs when they are at work. The smartphone app allows you to monitor, communicate with your pets, play laser games, toss their favorite treats remotely. Petcube has created a small device that is equipped with powerful hardware. Petcube is on the list of most innovative companies in Ukraine according to Forbes.
Ukrainian online drug search and delivery platform Liki24 has attracted $5 million in investment from Horizon Capital and a number of business angels. In June 2020, Liki24 started operating in Warsaw, planning to expand in the Polish market. Their services are also represented in Romania. Liki24 analyzes prices and availability of drugs in pharmacies, finds the minimum cost and delivers drugs to a convenient location, that is providing good services together with time and money saving.
Allset is a technology company with offices in Kyiv and San Francisco that develops and implements software for restaurants. Allset application allows to pre-order food in restaurants, book tables, pay in advance and leave tips. Before the pandemic, Allset focused on booking restaurants for in-person visits. With the corona crisis, they have expanded their product and now offer also meal takeaway with contactless delivery. Allset is a Ukrainian-root startup that received an $8.3 million investment, develops products in Kyiv and provides services in the USA.
Preply is an education startup of Ukrainian origin, based in Kyiv and Barcelona. The idea of Preply is to help people learn languages through the online platform. Its functionality helps to find the perfect time in your schedule, book lessons from your computer or mobile, and use a video full-fledged platform for communication with your tutor. The pandemic boosted the development of the startup: a large number of people left home, spending free time to improve their language skills.
Restream is a streaming service headquartered in Austin, Texas. The service allows users to simultaneously broadcast video content on several platforms and social networks, including Facebook, YouTube, Twitch, Mixer and LinkedIn. Restream has applications for Windows, Mac OS and Linux. Restream is a Ukrainian-American startup founded in 2014 by Oleksandr Khuda and Andriy Surzhynsky, Khuda is the company’s CEO. As of 2020, Restream has raised more than $50 million in investment in round A.
Ukrainian startup People.ai has reached a market value of $1,1 billion by receiving a new round of funding and thus has become a unicorn. The startup is an AI service that collects and analyzes data generated by sales managers to give them recommendations and, ultimately, to help close deals faster and more efficiently. People.ai software can record and analyze sales managers’ calendars and phone calls, helping companies determine, for example, the best number of customers for a single vendor.
Augmented Pixels is a Ukrainian project that develops navigation technologies used in virtual and augmented reality, robotics. In 2014, the company moved to California to participate in the startup accelerator Plug & Play. Augmented Pixels soon focused on augmented reality developments and became a product startup. Augmented Pixels technology allows robots and drones to navigate in space without GPS navigation. In 2021, Augmented Pixels attracted a $2 million investment. Ukraine remains the main development center, employing more than 30 people.
Depositphotos is an international photobank and one of the largest Ukrainian product companies. The story of Depositphotos began in 2009 and it took the company a few years to become the fastest-growing stock photography platform. Today, Depositphotos library has millions of stock photos, videos, and vectors on every imaginable topic and theme. Depositphotos is the ideal place to get all the best photos of high definition and quality.
DMarket is a virtual trading platform for buying, exchanging and selling NFT items and virtual game items. DMarket’s idea was to create a user-friendly store to sell all kinds of in-game items, such as weapon skins. Game developers receive income from the trading commission. DMarket is headquartered in Santa Monica, California. The company also has offices in Kyiv and London. In 2020, DMarket raised $7,2 million in investments.
Delfast startup has closed its funding round attracting $3,4 million from Ukrainian investors. The received funds will be used for the construction of an electric bike development center in Ukraine, which will meet the growing demand and accomplish pre-orders received from various countries of the world, in particular from the USA and Europe. According to the co-founder and CEO of Delfast Danylo Tonkopiy, the goal of the company is to build a modern electric bike factory and support the community of green electric transport manufacturers around the world.
3DLook has raised $6,5 million in investments in 2021. 3DLook developed a product that allows buyers to virtually try on clothes in real-time using AR. The application recognizes the size of clothes from photos of a person. The patented technologies of the startup scan the human body on two photos and with the help of artificial intelligence, neural networks create a 3D model to determine the size and other physical parameters, which is the best solution during the lockdown. 3DLook services are mostly used by American brands. The startup’s revenue in 2020 reached $1 million.
Exits
#15 Viewdle
Viewdle is a Ukrainian-American startup developing technologies for recognizing faces and various objects for mobile devices. Viewdle has unique face detection and recognition algorithms, being developed entirely in Ukraine. Viewdle was acquired by Google in 2012, the final sum of the exit is not announced.
#16 Looksery
Looksery created a mobile application that allows you to change your face in real-time. The company from Odesa gives a bright example of how great startups are made in the regions. In 2015, Snapchat acquired the Ukrainian team of Looksery for almost $150 million helping them to make the largest exit in the history of Ukrainian startups.
Axdraft is a Ukrainian startup that created an app for automating work with legal documents, making lawyers’ lives easier. The application analyzes your documents, creates templates that are error-free and fit the company’s corporate style. American company Onit acquired Axdraft in 2020 for $10 million.
#18 StepShot
In 2019, an international developer in the field of AI has bought a Lviv-based startup StepShot, engaged in automated process documentation. Together with UiPath, Lviv IT specialists will work towards RPA (Robotic Process Automation) – technology for business processes using software robots.
In 2020, Lviv game studio Hologryph, known for its Secret Neighbor game, received a $3 million investment from TinyBuild and became the holder of a control stock in Hologryph. The money will go to expand the team and support a new game for PlayStation 5 and Xbox Series X/S.
In 2021, Ukrainian startup Effa has announced a $500,000 round from an angel investor. Effa develops and manufactures environmental-friendly products, the first such product was a completely recyclable paper toothbrush. The startup will spend the attracted investments on product line development and team growth.
Influ2 is a startup developing an advertising targeting platform, using machine learning and big data to make personal advertisements. In 2020, Influ2 has announced an investment of $3,4 million in a seed round. The company plans to spend the money raised on marketing, product development, as well as team expansion in the United States and Ukraine.
In 2021, Ukrainian startup Propertymate got into Techstars Austin and received a $1 million investment. Propertymate is a platform for real estate agents that combines all customer information with real estate data in the market. With the Propertymate product, real estate agents save time and can enter into more transactions through the Propertymate network, interacting with other agents.
Reface is an application that allows users to replace faces in video or GIF. The application is based on GAN technology. This is the first AI application made in Ukraine, which took first place at the top of the American AppStore, ahead of TikTok, Netflix and Amazon. In 2020, Reface received a $5,5 million investment.
In September 2020, Raccoon.World raised investments of $900,000. The startup helps people recover from injuries and neurological diseases without visiting a rehabilitation center. Raccoon.World collaborates with physical rehabilitation facilities and insurance companies and provides its own digital platform through which patients can remotely undergo rehabilitation after injuries.
Mate Academy is a platform for learning programming, aiming not only to teach students but also to arrange them for their first job in tech. That is why students pay for the program after graduation – and only if they have found a job. In 2019, Mate Academy received $580,000 of investments.
Spin Technology is a SaaS (Software as a Service) data protection company with Ukrainian roots based in Palo Alto, California. The company protects SaaS data against ransomware, human error and insider threats. Spin Technology solutions and artificial intelligence provides 24×7 monitoring and detection against harmful threats, identifies business risks.
Ukrainian startup RetargetApp, which works in the field of online advertising, has closed a seed round from several foundations. The total size of the round is $1,2 million. RetargetApp develops a solution that automates advertising campaigns. The client only needs to specify the purpose of the campaign and its budget. RetargetApp analyzes client advertising statistics, finds the best options, creates advertising campaigns using big data and AI.
Kwambio: Ukrainians are learning to print ceramics on a 3D printer. Startup Kwambio developed its technology of 3D printing, using environmentally friendly powders. They began from making sophisticated designer accessories at a factory in Odesa. And now, together with European scientific laboratories, they are developing technologies for bones and human organs 3D printing.
DressX is a digital clothing store founded by Ukrainians in the United States. In 2021, they attracted $2 million in investment in a seed round. To get an item of virtual clothing, you need to upload your good quality photo with good lighting, shadows and wait 1-2 days to process it. The DressX team plans to use the funds raised to scale and develop sales of virtual clothing.
Competera is a platform that provides online stores with recommendations on price policy to maximize the client’s profits. In 2019, the startup received a $500,000 investment. Competera has changed the way retailers do pricing with the use of big data. In 2019, Crozdesk announced Competera to be the best price optimization solution.
For the years of its Independence, Ukraine has always been a place where great startups are born and brilliant ideas are realized. Ukraine is a deep talent pool, where projects aimed at meeting the ever-changing customer’s needs were created, a lot of them experienced rapid revenue growth and achieved a market capitalization of $1 billion, becoming a unicorn. The stories of such skyrocketing startups who devote themselves to doing something outstanding and progress in it would surely inspire you and your team to create and innovate.
