Attendees walk past the Ukrainian stand at the Web Summit 2022 tech conference in Lisbon, Portugal.
Patricia de Melo Moreira | Afp | Getty Images
LISBON, Portugal — As the war in Ukraine rages on, the country’s tech entrepreneurs are trying to stay positive.
Sigma Software CEO and co-founder Valery Krasovsky told CNBC on the sidelines of the Web Summit tech conference. in Lisbon.
Ukraine-based Sigma, which has 2,000 employees, has outfitted its offices with diesel generators and Starlink Internet terminals to help employees keep working despite the Russian shelling of critical energy infrastructure. did.
“Even in this situation, nothing will happen that will stop us from delivering business,” he added.
Sigma is one of 59 Ukrainian startups that participated in last week’s event. Ukraine had a notable presence at the Web Summit, seeking help from the global tech community to step up its fight against Russia.
In 2021, Ukraine will have a small booth at the Web Summit, Krasovsky said. This year there was a much larger stand lit up in yellow and blue. A large crowd of visitors, including Ukrainian First Lady Olena Zelenska, surrounded the venue, some of whom were accompanied by armed guards through the venue.
Ukrainian Deputy Prime Minister Mikhail Fedorov (right) and First Lady Olena Zelenska (center) at the Ukrainian booth at Web Summit 2022.
Rita Franca | Nafoto | Getty Images
On opening night, Zelenska delivered an impassioned speech, calling on tech entrepreneurs and investors to support the country.
“You are the force that moves the world,” Zelenska, wife of Ukrainian President Volodymyr Zelensky, told a packed audience on Tuesday.
While Russia uses technology for “terrorism,” the international community has “technology that can help, not destroy,” she added.
Russia calls the invasion a “special military operation”. But for Ukraine it is a gratuitous land grab aimed at undermining its sovereignty.
rebuild with technology
Ukrainian officials and entrepreneurs said technology will be key in helping the country rebuild after the Russian invasion.
Moscow launched an invasion of Ukraine in February and the war devastated the country’s economy. Statistics from the Ministry of Economy show that gross domestic product has shrunk by 30% so far this year.
The World Bank predicts that Ukraine’s Gross Domestic Product will contract by 45% in 2022.
“People in Kyiv and some other cities continue to build, do business and export,” Dima Shvets, CEO and co-founder of Ukrainian social media startup Reface, told CNBC. Told.
Shvets runs Reface out of London, where he lives with his wife and four-year-old daughter. About half of his team of nearly 200 people continues to work in Ukraine. When the bombing begins, people use the underground Reface’s Ukrainian outpost as a refuge.
Reface rents a hotel for 50 people in western Ukraine and has separate electrical infrastructure so it can continue to work safely, Shvets said. He added that he had tried to move the workers to Portugal “systematically” but had difficulty persuading them.
“People have homes and families in Ukraine,” he said.
In an interview with CNBC’s Karen Tso, the Ukrainian First Lady said the role of technology in Ukraine was “impossible to underestimate.”
“In this situation, it is difficult to talk about sustainability, technology and progress. I hope you can.”
But as winter approaches, Ukraine will need more than IT investments to survive the harsh months ahead.
There were reports of massive power outages lasting several hours across the country. About 40% of Ukraine’s energy system has been destroyed, according to the government.
“Ukraine needs more weapons, more military support,” Zelenska said, asking specifically for air defense missiles.
capital comes
According to the National Bank of Ukraine, Ukraine’s IT industry generated $2 billion in revenue in the first quarter of 2022, up 28% year-on-year despite the devastation caused by the Russian invasion.
The war has forced millions of Ukrainians, including technical experts, from their homes. Many hold positions abroad. It is hoped that those workers will return once the fighting is over.
Some companies are hiring more jobs in Ukraine, betting that the country’s tech industry will be stronger after the war is over.
Two months ago, Lithuanian VPN software company Nord Security opened an office in the western Ukraine city of Lviv. The company plans to hire 100 people there, according to CEO Tom Okman.
“I think it’s time to rebuild Ukraine and I think the talent there is great,” Okman told CNBC.
He said Ukraine is home to thousands of skilled software programmers and engineers. “Think of how many American companies he outsources IT to Ukraine,” he said.
Founders of multi-billion dollar ‘unicorns’ such as Grammarly’s Max Lytvyn, Alex Shevchenko and GitLab’s Dmitriy Zaporozhets hail from Ukraine. Google, samsung When Amazon We also have a research and development center in Japan.
But there are also challenges other than war facing the Ukrainian tech ecosystem. The country’s venture landscape is still emerging. Domestic startups have raised only $22 million so far this year, according to Deal Room data.
Reface’s Shvets said: “What we should do now is show more examples of entrepreneurship.”
Shvets said the Ukrainian government should look to support domestic entrepreneurs with tax incentives and other business promotion initiatives.
However, there are signs that sentiment towards Ukraine from tech investors is improving. Last month, Horizon Capital, a Kyiv-based VC firm, raised $125 million for a startup fund aimed at backing Ukrainian founders.
SID Venture Partners, a venture fund founded by Sigma and fellow Ukrainian tech companies Ideasoft and Datrics, has so far invested in 10 startups with Ukrainian founders, Krasovsky said. rice field.
After raising an initial $15 million in December 2021, the company plans to raise an additional $50 to $60 million from institutional investors.
