Tech

Tech in 2021: Ukrainian startups go public, partner with Elon Musk, raise millions

Ukraine-founded startup GitLab started trading on the Nasdaq stock exchange on Oct. 14, 2021, issuing over 143 million shares. (Photo: GitLab)

Venture funding in Ukrainian startups hit an all-time high in 2021.

Startups with Ukrainian founders attracted a record $1.5 billion from local and foreign investors in 2021, according to the Kyiv Independent’s estimates, compared to $577 million last year. The actual number could be even higher as dozens of other startups haven’t disclosed their investment deals.

But it wasn’t all about money. Ukrainian startups hit important milestones such as holding initial public offerings, reaching “unicorn” status and testing waters in risky industries like cryptocurrency and rocket building.

Here’s a recap of five stories that shaped the Ukrainian startup scene this year. 

GitLab’s mega IPO

Ukraine-founded startup GitLab started trading on the Nasdaq stock exchange on Oct.14, issuing over 143 million shares. The startup is already valued at $13.5 billion, while its founder, Ukrainian Dmytro Zaporozhets, 32, has become the richest software engineer in Ukraine, making a fortune of nearly $460 million.

In November, Zaporozhets quit, leaving the company to the Dutch native Sid Sijbrandij. Zaporozhets is only the second Ukrainian, whose business went public in the U.S. The fintech startup Affirm, founded by Ukraine-born Max Levchin, the co-founder of PayPal, became public in January raising its market cap from $12 billion to $28 billion today.

GitLab develops online services that help tech specialists to work faster and more efficiently. It automates the process of writing code, detects bugs and connects specialists that work on different parts of the project — from development to operation. The company’s big-name clients include Nvidia, Siemens, Goldman Sachs, Zip Recruiter, Pearson and Radio France.

All 1,350 of GitLab’s employees work remotely in 65 countries, making it one of the world’s largest public companies that doesn’t have a head office.

Vlad Yatsenko (L) and Russia-born Nikolay Storonsky founded fintech startup Revolut in 2015. This year, it became U.K.’s most valuable fintech company after raising $800 million from investors, who valued the enterprise at $33 billion. (Courtesy of Revolut)

First tech billionaire

The co-founder of the U.K.-based tech startup Revolut, Vladyslav Yatsenko, has become the first Ukrainian billionaire who made his fortune in the technology business. With a net worth of $1.1 billion, he could enter the upcoming Forbes list of ten richest Ukrainians, between oligarch Vadim Novinsky and financial and ironworks tycoon Oleksandr Yaroslavsky.

Yatsenko’s digital banking startup became U.K.’s most valuable fintech company in July after raising $800 million from investors, who valued the enterprise at $33 billion. 

Revolut is a neobank that operates online and doesn’t have brick-and-mortar locations. Its mission is to create a “global financial super app, allowing customers to manage finances through a single platform. Revolut allows users to buy cryptocurrencies, trade stocks, buy insurance products and create accounts for children.

Revolut is not available in Ukraine – it only allows money transfers to the country. The startup plans to use the investment to expand in the U.S, enter India and other international markets.

Ukrainian startup People.ai has attracted $100 million of investment on Aug. 11, 2021, bringing the total valuation of the company to $1.1 billion. (Courtesy of Dou.ua)

New unicorn

Ukraine-founded startup People.ai has joined the club of the so-called ‘unicorns,’ startups valued at over $1 billion. This list also includes companies like Grammarly, GitLab, BitFury and Revolut, all of which have Ukrainian founders.

People.ai attracted $100 million in August, bringing its total valuation to $1.1 billion. The startup created a program that helps sales specialists forecast sales, close deals and find new clients more effectively. Among the company’s clients are big names like Zoom and Lyft.

The company’s strategic goal is to go public, according to its co-founder Oleg Rogynsky. After the recent investment round, Forbes estimated Roginsky’s fortune at $440 million – he is now on the list of the 25 richest Ukrainians.

California-based People.ai employs over 240 people, 40 of whom work from the office in Kyiv. Over the last year, People.ai increased the number of its clients by 260%, but it is not profitable yet.

Depositphotos designers work inside the startup’s office in Kyiv (Courtesy of Dou.ua)

Big acquisition

The U.S. firm VistaPrint acquired Ukraine-founded company Depositphotos in October for $85 million. It’s one of the largest Ukrainian IT acquisitions in the last few years.

The stock photo website Depositphotos will continue working as a separate brand, employing nearly 450 people in six countries, including Ukraine. Its founder, Dmytro Sergeev, got nearly $50 million from the deal.

The U.S. VistaPrint creates business cards, websites, and merchandise for small and medium-sized businesses – it has over 20 million users and employs over 6,000 people in 29 offices worldwide. The company will help the Ukrainian firm launch new products and expand on European and U.S. markets.

VistaPrint’s clients could potentially use Depositphotos’ platform Crello to create Instagram posts, logos, gift cards, or presentations, and then turn to Vista to print them or put them on merchandise.

The U.S. space company Firefly Aerospace, co-owned by Ukrainian entrepreneur Max Polyakov, develops small and medium-sized rockets and satellites for commercial launches into orbit. In May 2021, the company’s valuation exceeded $1 billion. (Courtesy of Firefly Aerospace)

Rocket business

It was a big year for the U.S. company Firefly Aerospace, co-owned by Ukraine-born entrepreneur Max Polyakov, 44.

Firefly launched its first rocket into orbit in September from Vandenberg Space Force Base in California. The rocket exploded two minutes into the flight when one of its four engines shut down. The attempt cost Polyakov $15 million.

The failure during the first test flight didn’t come as a surprise: Getting to space is hard, especially for a young startup like Firefly. Polyakov has stayed optimistic and scheduled the next flight for late January.

To accomplish his space dreams, Polyakov acquired South Africa’s Dragonfly satellite maker in April. Polyakov didn’t disclose how much he paid for the company, but said that with the help of Dragonfly he could start manufacturing all the spacecraft “in-house.”

Firefly has also partnered with the U.S. company SpaceX, owned by world’s richest man Elon Musk. SpaceX’s Falcon 9 rocket will send Firefly’s lunar lander to the surface of the Moon in 2023. This mission is a part of the $93.3 million deal between Firefly and NASA signed in February.

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