Monday, November 28, 2022

Growing global business amid war: Lessons from Ukrainian tech company Kitrum

by Daryna AntoniukNovember 21, 2022 2:01 pm
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Growing global business amid war: Lessons from Ukrainian tech company KitrumEmployees of the Ukrainian software development company Kitrum in their office in Kharkiv. Before the war, Kitrum employed around 150 people in Ukraine. (Kitrum)

Editor's Note: This story was sponsored by the Ukrainian software development company Kitrum.

Ukrainian tech entrepreneur Vlad Kytainyk, 34, has spent substantial time in the U.S. building his global business in the past seven years. Still, he has no intentions of settling there for good.

“I'm a Ukrainian on a long business trip,” he says.

During an online interview with the Kyiv Independent, he wore a T-shirt with President Volodymyr Zelensky's name printed on it and proudly showed the camera a U.S.-issued commemorative coin dedicated to the bravery of the Ukrainian people.

Although he lives on another continent, Kytainyk retains close ties to his homeland: His software development company Kitrum employs around 150 people in Ukraine. Before the full-scale Russian invasion began, many of them worked in Kytainyk’s native Kharkiv, Ukraine’s second-largest city, located just 40 kilometers from the Russian border.

Kharkiv was one of Ukraine’s leading tech hubs that housed some of the best technical universities and more than 45,000 of the country’s 300,000 developers. When Russian forces started to heavily bombard the city after Feb. 24, most businesses and their employees were forced to escape.

Kytainyk had pre-prepared a six-page plan with instructions on how to get his Ukrainian staff to safety and continue running the business even amid the destruction and chaos.

And it worked. During the war, the company has not lost a single client, most of whom are based in the U.S., Europe, and Australia, and has continued to grow.

Employees of the Ukrainian tech company Kitrum play table football in their office in Kharkiv in August 2021. (Kitrum)

Global company with Ukrainian roots

Growing up in a low-income family without a father, Kytainyk had to make his own money to pay for university – one of the best in Kharkiv – where he studied computer science. Over the years, he has had numerous professions, from a security guard at McDonald's to a salesman and an interpreter.

In 2014, Kytainyk founded Kitrum, “a one-stop custom software development company.” He decided to gear his company towards global clients, as the demand in Ukraine was too small at the time. 

Many Ukrainian tech firms do the same – they outsource their skills in search of money and prominent clients abroad. Ukrainian businesses either hire their own IT specialists or work with tech companies that operate in both local and international markets.

“If you work locally, you find yourself in a very competitive environment where companies are fighting for the same customers,” he says. “We want to swim in the big ocean where there is enough fish for everyone.”

After a road trip across the U.S., Kytainyk moved to Florida, registered a new legal entity, and hired his first employees in 2017. Since then, he has opened six offices in other countries, including Israel, Kazakhstan, Mexico, and Ukraine, to work across all time zones and provide customer services around the clock.

Vlad Kytainyk, CEO of Ukrainian company Kitrum, in Florida in July 2021. (Vlad Kytainyk)

Today, Kitrum is a company with 360 employees scattered across the globe. Each market has its benefits and many talented engineers, according to Kytainyk. But regardless of geography, he proudly calls Kitrum “a global company with Ukrainian roots.”

To attract the best professionals around the globe, Kitrum pays competitive salaries, which in Ukraine average at $3,400 per month for an IT specialist and $4,200-$5,000 in Europe and the U.S. The company also offers a wide range of additional benefits for its employees, such as arranging online yoga classes during the Covid-19 pandemic while the staff was forced to work from home.

“A tech company should be a service, not a regulator. It should provide opportunities for development and growth,” says Kytainyk.

As of the end of 2021, Kitrum has worked with over 60 clients, including U.S. e-book subscription service Scribd, robot manufacturer Turf Tank, and the French online marketplace for carpooling BlaBlaCar. 

According to Kytainyk, his company is growing by 60-70% annually. Its annual revenue reached almost $10 million in 2021. 

Adapting quickly and donating to Ukraine

Two weeks before the start of Russia’s all-out war, Kitrum developed a step-by-step emergency plan in the event of Russian military escalation.

At the time, about half of the company’s staff was based in Kharkiv and another 20% were in Kyiv, so Kitrum’s main priority was evacuating their employees to safer areas.

When Russian missiles started raining down across Ukraine, including its two biggest cities, Kyiv and Kharkiv, Kitrum acted according to the pre-prepared plan. 

The company helped its employees with the logistics of relocating during the war by finding housing abroad and providing additional compensation. Kitrum also compiled all information on entry rules from Ukraine for European countries and gathered the contacts of lawyers and therapists.

At first, Kitrum’s clients worried about whether the company would be able to continue operating effectively during the war, says Kytainyk. Their doubts vanished when they saw how the company’s developers held meetings from bomb shelters and continued to complete projects on time.

Kytainyk believes that the love for their work and the ability to adapt quickly to new realities have allowed the company to carry on. In 2022, Kitrum ranked 50th in the Inc.5000 rating, which evaluates business growth and companies’ abilities to adapt to rapid changes.Employees of the Ukrainian tech company Kitrum in their office in Kharkiv in September 2021. (Kitrum)

“No one refused to work with us,” says Kytainyk. Moreover, in the first seven days of the all-out war, Kitrum even signed two new contracts with clients. 

“Foreign clients want to work with Ukrainians – they love their courage and willingness to defend their values,” he adds. “This is a great competitive advantage.”

Many of their clients also support Ukraine beyond their partnership with Kitrum by donating to the needs of the Ukrainian army as it continues to fight the Russian aggression.

Kitrum and its clients have already donated more than $80,000 to Ukraine. Aside from direct deposits, the company buys cars and drones for the army and provides food for civilians and soldiers. 

Though this year will be less profitable than the previous ones for the company, “charity has become part of our business,” Kytainyk says.

Ukrainian IT specialists have long been highly valued on the international market, and, after having proved capable of working effectively even in the most extreme of conditions, the demand for their services will skyrocket, Kytainyk believes.

He also hopes that his native Kharkiv will bounce back as one of Ukraine’s leading tech hubs and continue to attract foreign investments.

“I am optimistic about the future,” he says. “Ukrainian tech businesses have a lot to offer to the world.” 

Daryna Antoniuk
Daryna Antoniuk
Tech reporter

Daryna Antoniuk is a tech reporter at the Kyiv Independent. She worked in the same role at the Kyiv Post and has focused on Ukrainian startups, investment and the fintech market. Antoniuk previously was a tech reporter for Forbes Ukraine. Her work has also been published at Sifted and The Record. She graduated from Taras Shevchenko National University in Kyiv with BA in journalism and communications.

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