A Blog by Jonathan Low


Jun 1, 2022

Ukraine's Tech Startups Are Resuming Business Despite Air Raids, Bombs

The country's vibrant and growing tech community has adapted, recognizing that no place is entirely safe from Russian bombs or missiles, but also that their talent - and the remarkable maintenance of internet connectivity - makes them a valuable resource to the global tech industry as well as to their country. JL 

Pranshu Verma reports in the Washington Post:

Three months into Russia’s invasion of Ukraine, the country’s booming tech community is rebounding. As the war continues, founders and employees have settled into new routines, working amid bombs, gunshots and air raid sirens. They take meetings, write emails and pitch decks from apartment hallways, bedroom closets and underground bunkers, trying to meet work deadlines regardless of the circumstances. Employees regularly record videos to explain projects and who their clients were. That way, if an employee is stuck in a bomb shelter without Internet, is on the front lines or had to flee, another teammate could pick up their work. Since 2019 Kyiv has more than 1,000 start-ups and tech companies.

On May 3, shortly after 8 p.m., Andrey Klen had a decision to make. Bombs had just dropped near his apartment in Lviv, Ukraine, but he had a conference call at 9 p.m. Klen was huddled, along with his dog, in his apartment hallway, trying to stay away from glass windows that could shatter.

As the clock struck 9, he decided to take the meeting.

Amid air raid sirens, flickering lights and family members texting to inquire whether he was safe, Klen — the founder of a technology start-up called Petcube that creates interactive cameras for pets — logged on and sped through the day’s entire agenda. After finishing, he scanned his phone trying to find out whether it was safe to take his dog outside for a much needed bathroom break before the 11 p.m. curfew.

“Unfortunately, that’s the new norm,” Klen said. “But it’s not like I’m a hero — we do this all the time.”

Most devote their off-hours to helping the country’s war effort in any way they can. Others, unsure when the conflict will end, are trying to resume normal life by resuscitating a once vibrant start-up ecosystem that has seen many flee.

“While the war is going on, you cannot persuade somebody to come back,” said Pavlo Kartashov, director of the Ukrainian Startup Fund. “But once it’s over, you have to have a very comfortable environment … for start-ups to come back.”

Since 2019, Ukraine’s tech community had been thriving. Kyiv, the country’s capital, had transformed into Ukraine’s largest tech hub, boasting more than 1,000 start-ups and tech companies, according to the Ukrainian Foreign Ministry. Investment in the country’s start-up sector increased tenfold, from $39 million in 2014 to $509 million in 2019.

But in late February, when Russia invaded Ukraine, the momentum came to a halt. Tech workers went from stressing over client deadlines to worrying about where to relocate their families. Companies funneled portions of their revenue to workers who needed money to get somewhere safe. Chains of command were disrupted as many men of fighting age took leave from their jobs to join the front lines.

Alyona Mysko, a 29-year-old chief executive of the Ukrainian start-up Fuelfinance, which creates cloud-based finance departments, said interruptions started right from the beginning. On Feb. 24, the day the invasion started, she had to cancel the launch of her company’s new website. In the days after, Mysko relocated from Kyiv to western Ukraine with her family and worked to get employees safe.

Since then, her company has had to adapt constantly. In the first few weeks after the invasion, customers understood her team was busy staying alive, but pretty soon the deadlines for international clients came roaring back, she said.

Mysko and her employees had to find ways to meet deadlines from wherever they were. Often, that meant working from coat closets or underground bunkers on their phones or laptops with spotty WiFi, trying to keep safe as bombs fell nearby.

Employees started regularly recording videos to explain what projects they were doing and who their clients were. That way, Mysko said, if an employee was stuck in a bomb shelter without Internet, was called to fight on the front lines or had to flee a dangerous situation in a moment’s notice, another teammate could pick up their workload.

“We’ve started to understand that we cannot be in a safe place in Ukraine — it’s simply impossible,” she said. But now, she said, “we understand how to manage for the most part.”

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Kartashov, of the Ukrainian Startup Fund, said the invasion has altered the balance of start-up life in Ukraine. Of the tech workers who stayed in Ukraine, many fled to the west to areas such as Lviv and its surrounding regions, which was seemingly safer. That has caused rents to rise in the area and made it overcrowded.

Many who fled went to Poland, Kartashov said. Since that country has existing initiatives to relocate and fund start-ups, Kartashov is worried they might not come back. “With all these reallocation and easy access to money [initiatives] — start-ups have drained from Ukraine,” he said.

To stem the permanent loss in talent, Kartashov and other leaders in the tech community are working to raise 20 million to 30 million euros in funding to restart Ukraine’s ecosystem. If they can raise the money, he hopes to use it to invest in start-ups, restart hackathons and organize get-togethers such as investor and mentor meetups.

And for Klen, the past three months have shown how resilient his workers can be. Every one of his roughly 50 employees continues to hold their day job and does some kind of volunteer work after-hours to support the country’s war effort, he said.

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Some are helping fight on the front lines, while others are helping Ukrainian politicians lobby U.S. officials and others for war funding. Others help the country build technological applications used in fighting off Russians. “You no longer have a single job — you have multiple jobs,” he said. “Because as a Ukrainian, you have a s--- ton to do.”

That camaraderie has united his team as never before, he said. “People want to keep their businesses running, they want to keep their family safe,” he said. “We want to have the same Ukraine we were used to … so we’ll keep going.”


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