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Business, 6 MIN READ

Ukraine: The Up-and-Coming IT Hub

October 28, 2019
ALEX SLOBOZHAN
When you look for an affordable software development website, Asian or South American companies are the first to come to mind. However, Ukraine has been steadily gaining in popularity and is even now turning into a powerful IT hub. Today I invite you on a journey. It will take us throughout the best web development companies in Ukraine, unicorn startups, and international hackathon winners.

4 Things You Didn't Know About Business in Ukraine

With so many conflicting reports about Ukraine, it might not be among the desirable offshore destinations for web and mobile app development. However, the economy and business conditions have drastically improved over the last few years. Consider these numbers before you think Ukraine is not suited for running a business:

  1. Ukraine is number 71 of 190 on the Ease of Doing Business list, according to the latest report by the World Bank. The country surged up the ranks after the lowest point in 2011 when Ukraine took up 152nd place. Since then, Ukrainian regulatory, political, and economic situation has improved significantly, and the country had been steadily climbing up. The latest rise took place in 2018 when Ukraine jumped from 76th to the 71st position in the rating.
  2. Ukraine's Competitiveness Index is 56.99 out of 100, according to the Global Competitiveness Report of 2018. The number might not seem impressive; however, the country saw a significant surge in 2016 when the index jumped from 4.03 to 53.92. The positive trend represents improvements that make Ukraine a desirable state to live, work, and do business.
  3. The Ukrainian investment climate has been steadily improving. According to Ukrstat, within the first six months of 2019, the Ukrainian economy received $1,259.5 million of direct foreign investment. Cyprus, Holland, Switzerland, and the US are among the top investors.
  4. Ukraine is ranked 37th in the world by Internet speed with an average speed of 12799.43 KBps as of the first quarter of 2017. While this places Ukraine behind many G20 countries, such as South Korea, Japan, or the US, it is still ahead of many EU states, as well as India, China, Belarus, and the Russian Federation. High-speed Internet connection makes it easier for offshore development companies to stay in touch with their clients and develop successful solutions.
Some numbers above don't seem that impressive when out of context. However, if you consider the all-around positive trends in investment, economy, and business, it becomes obvious Ukraine is on a steady uphill trajectory. To reach and exceed the quality of life of EU states, the Ukrainian government is invested in making the country a desirable business and investment destination.

3 Reasons to Choose Ukrainian Outsource Development Companies

There are multiple considerations you need to keep in mind when choosing an offshore technical partner, and we've covered them many times in our posts. However, three factors can make or break your project long before the development is complete. These include low hourly rates, high technical expertise, and seamless communication. Unlike many outsourcing destinations, Ukraine has them all in spades.

Great value for money is the main reason behind the popularity of Ukrainian web and mobile app development vendors. Hourly rates start as low as $22 and rarely go above $40. That's three to four times lower than what you would have to pay to EU or US-based development teams. In fact, it is possible to create an MVP for under $10,000 if you know where to look for affordable and high-quality development. We've talked at length about the best web development companies in Ukraine for startups on a budget. If you missed the post, check it out here.

Technical expertise and cutting-edge technology experience also set Ukrainian IT teams apart from their rivals. Unlike many outsourcing destinations, Ukraine possesses a robust education system geared towards STEM majors, including software engineering. You'll see Ukrainian high schoolers and university students taking part and winning international competitions, hackathons, and contests. They later join established offshore development companies to gain practical experience and hone their skills. This system creates thousands of qualified developers, testers, and business analysts capable of dealing with the most complex projects.

Insignificant cultural and communication barriers make web development companies in Ukraine desirable partners for many European and American startups. With a minimum number or bank holidays, a similar mentality, and a good command of English, Ukrainian development teams make it easy to get in touch or set up the NDA and the contract. Regular communication is comfortable because of only two hours of the time difference between Ukraine and most EU states.

2 Ukrainian-born Unicorns and More

Web development companies in Ukraine do not limit themselves to helping American and European startups create and improve their projects. Instead, they come up with unique ideas and build successful companies that are valuated at $1 billion and more. Grammarly and GitLab are prominent examples of Ukrainian startups that have long since outgrown their home turf and became international giants.
Ten Years of Perfect English with Grammarly
If you've never heard of Grammarly, you must still be struggling with your business and personal writing. The company, founded in 2009, offers AI-powered suggestions to improve English writing for students, professionals, and businesses. Unlike many startups, Grammarly focused on making profits from the get-go without raising investments. The company went through its first investment round as late as 2017 and secured $110 million from General Catalyst fund and other investors.

Four years ago, Grammarly could boast 1 million daily users, but now the number exceeds 20 million. This includes people using the free version of the app that was only launched in 2015. By now, the company has offices in Kyiv, San Francisco, and New York. With a steadily growing team, Grammarly now works on creating an all-purpose AI-powered communication advisor to help people better understand each other in various contexts.

Despite the growing competition by Microsoft and Google, Grammarly is still the acknowledged leader of the text checking software market. Their list of partners includes over 1,000 schools and universities, such as Arizona State University or the University of Phoenix. Cisco, Dell, The Economist, and Expedia are among the companies that enjoy Grammarly Business accounts.

According to Grammarly management, the company still has a long way to go. They have completed only 1 percent on their way to reaching 2 billion English speakers spread around the world.
All-in-One Solution for Developers by GitLab
GitLab was founded in 2011 but did not gain momentum until 2015 when the team expanded to include 50 people and raised $1.5 million in a seed round after a successful Y Combinator program. In September 2019, GitLab raised $267 million in Series E round, reaching an overall investment of $426 million. Meanwhile, the company's valuation exceeded $2.7 billion, making it another Ukrainian-born unicorn.

GitLab is a DevOps and collaboration platform, an all-in-one solution for development teams looking for a GitHub alternative. According to one of the founders, GitLab will soon be able to solve all the developers' problems, eliminating the need for integration of third-party tools.

With over 100,000 corporate clients, GitLab partners with Nvidia, Ticketmaster, Goldman Sachs,
Charter Communications and others. The team includes 800+ members spread across 55 countries, and there are over 200 open positions with GitLab. The IPO is scheduled for November 2020.

    Takeaway

    Ukraine is no longer just a home of hundreds of outsourcing development companies. It is turning into a desirable investment and business destination. Moreover, Ukrainian technical specialists and business owners are coming up with profitable ideas and creating successful startups. If Grammarly and GitLab haven't convinced you of Ukraine's potential, check out BitFury, People.ai, Busfor, Hired, or Jooble. These are just a few startups that have raised investment over the last five years.

    Where is FreshCode in all this? We are among the best web development companies in Ukraine. For over five years, we've been helping startups and SMBs create successful products, streamline operations, and increase revenue. We work with clients from 20+ countries across the globe and are always available for consultation.
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