2015 saw many changes in the role played by start-ups and joint venture investors in the Ukrainian financial marketplace.
According to the CEO of the GrowthUP Group, Denis Dovgopolyi, 2015 ended as the best year yet for these sectors– but it also had the most missed opportunities during the past 10 years.
On one hand, there has been turbulence in the IT sector, the country is still at war, the national economic crisis is not yet over, and many investors are waiting for better times. On the other hand, it’s been a long time since Ukraine has seen so many positive developments during a single year: a Ukrainian startup was acquired for a record $150 million by a well-known foreign company, several other start-up ventures have also been successful, and major investors like the EBRR and the Soros Foundation have injected capital into Ukrainian businesses.
Significantly, many well-known businesses have matured: Petcube, that began only a few years ago as a mere idea, is now selling products through Amazon and Best Buy, and one gadget– a camera flash for iPhones called iBlazr– became the first Ukrainian item featured in Apple Stores. There are more than enough reasons to be proud of Ukrainian business achievements, but what companies were particularly successful in 2015?
AIN.UA has rated Ukrainian startups, as of the end of 2015, based on a survey of leading industry experts. Since last year’s ranking, the top ten changed significantly.
AIN.UA asked these experts (who are philanthropists, venture capitalists and entrepreneurs) to name no more than five start-ups that achieved the best results in 2015. The relevant criteria included several financial outcomes: the businesses must have either a revenue stream and/or a successful market exit, must development new market ecosystems or open access to new markets, and must be free from corruption.
The rankings included only businesses run by Ukrainians which began operating since the beginning of 2013. Whenever a start-up was named by one of the experts, it was awarded a point. The overall rankings were determined by the total number of points received per company. Here is the list of winners, the list of the voting experts, and the list of all nominees in alphabetical order.
Looksery – An app for editing photos and video in real time
For starters it should be noted that our editorial committee has long debated whether to include companies that no longer exist as separate entities. But we decided that the sale of Looksery for $150 million was by far the main event in the 2015 start-up market, and to exclude it would make no sense. As noted by Natalia Berezovskaya from Detonate Ventures, “Looksery definitely became newsmaker №1 in 2015, so no more explanation is needed.”
This business, which provides technology for real time editing of images and videos, took off quickly. AIH.UA first talked with this startup at IDCEE-2014 and at that time its ambitious plans sounded unrealistic. But in just a year the company was able to find customers in Western markets by licensing its technology and began generating revenues of $1 million per month.
The Looksery application is no longer available in App Stores because it was acquired by Snapchat Lenses. What other Ukrainian startup can brag that its technology was used by the Terminator himself to take a New Year’s selfie?
The company was founded by Victor Shaburov. Shaburov previously started the Handster Company in Odessa, which was successfully sold to Opera Software. Although Shaburov initially continued in a management role at Opera, he wound up leaving the company to join Looksery. The idea behind Looksery comes from the mind of inventor Yuri Monastyrshin.
Ecoisme – A home energy management system
Ecoisme is a mission-driven firm, with the goal of preserving the environment worldwide by helping households save money through efficient energy consumption. This is why it was recognized by some experts as a nominee. Ecoisme has regularly been included in the ratings of the best Ukrainian startups. In 2015 it was recognized at iForum.
Ecoisme is a home energy management system that measures household energy consumption through the switch box to the home’s power supply. The system records data on energy consumption and provides detailed analytics to keep track of excess energy consumption and identify opportunities for savings.
“In addition to developing a successful product, the company also drew attention to energy conservation generally. The business has become quite well known in part because of its impressive marketing presentations at international start-up gatherings. These things have formed a positive image of the country,” all according to Max Yakover, creator of “Chasopys, ” in highlighting this start-up among the various nominees. This year, Ecoisme represented Ukraine, along with other well-known companies, at the Startups Roadshow in London, where it impressed investors.
Ecoisme also won the pitch session “Utility Day” at conference CeBIT-2015 in Hannover and received an award from RWE, Europe’s largest vendor in the area of energy conservation.
In 2014 Ecoisme raised 80,000 euros from Polish incubator Hubraum (a project of Deutsche Telekom), and the company moved to Krakow. This year the company obtained an investment from renowned angel investor Godska Bastian, who has become an adviser to the company on strategic marketing.
Concepter – The creator of flash iBlazr and other technologies
Concepter first became famous in 2013 by conducting a successful campaign on Kickstarter. At that time very few start-ups from Ukraine dared to participate on this platform. Since then, Concepter has grown into an international business, its camera flash iBlazr has been offered for sale in Apple Stores, and it is actively copied by chinese counterfeiters. ” “I have not only heard of them—I’ve even purchased their product,” said Victor Shaburov.
2014 was a very successful year for the company. It launched a second version of iBlazr 2, and, through Kickstarter, achieved the company’s fundraising goal for this product, $70,000, in just three days. The product is now being sold at Apple Stores. According to some experts, the second release of this product was a real breakthrough. “The real breakthrough came in the second version. It seems that there is nothing complicated about it, just a camera flash with Bluetooth, but its implementation and presentation are what distinguish it,” according to Peter Bondarevskiy, co-founder of Coppertino.
In addition, the company has announced several new products, among them being “Fitbit monitoring time,” a time tracker that the company claims is the first such device of its kind. With this app, users can keep track of how much time they spend with family and friends. The company is going to present this new product at the Consumer Electronics Show (CES), a venue at which Concenter regularly participates.
Concenter’s management philosophy includes sharing knowledge with colleagues in the market. The company is planning to start production in China and plans to share details of its experience there with other companies.
Jeapie – A service that delivers mobile push-notifications
A 2015 deal between the Ukrainian companie Jeapie and the Canadian company Mobify became, after Looksery, the second largest market exit in Ukraine. That is why experts voted for Jeapie as a leading startup. The exact amount of the purchase price was not reported to the public, but it is known that it was a seven figure amount. Earlier, Jeapie had obtained investments from both the growth fund GrowthUP+ and the investment company Digital Future. For each of them, this was the first exit in their respective portfolios.
Jeapie is a service for the delivery of mobile push-notifications for businesses that want to save on the cost of SMS messages. The app comes in two versions: a simple one to receive notifications only and a complex version that provides “smart” cross-platform delivery notifications, statistics, newsletters, audience segmentation, etc.
Mobify’s geographic footprint includes Europe, America and Asia.
The founders of Jeapie, Oleksandr Mikhailenko (CEO) and Artem Shananin (CTO), have decided to relocate to Vancouver, where the Mobify head office is located, and where they will work to integrate their products into Mobify’s platform. Both the development and marketing teams will remain in Ukraine. All current customers and partners of Jeapie will continue receiving full technical support services, but the company will no longer accept new customers. Large customers will be encouraged to migrate to the Mobify platform because updated versions of Jeapie as a separate service will no longer be available.
Competera – An online e-commerce analytical pricing service
Competera is little known in Ukraine. This company provides a real-time service allowing online merchants to set prices daily, tracking changes in the global marketplace. The company initially focused solely on markets in former USSR countries, with its headquarters located in Russia, where most of its customers are also located. Competera now has offices in St. Petersburg, London and Kyiv.
Previous investments in Competera (if any) were not publicly announced. Once, at an event held by angel investor UAngel, Competera’s cofounder Alexander Galkin said that the company had repeatedly been offered investment capital, but since, by that time, Competera was already making money, it did not need external investment.
Although the company rarely gets attention in Ukraine’s IT sector, there have been a few times it “lit up” on AIN.UA. For example, Competera was awarded an AllBiz certificate for achieving one million advertising views in last year’s start-up competition and received an IDCEE award in the category of “Innovative services for retail” on E-Awards.
DelFast – Deliveries in an hour by electric bike
In late 2014, Daniel Tonkopy, a Ukrainian entrepreneur, launched DelFast, bringing together two hot sectors, logistics and energy efficiency. He got started in Kiev with 10 electric bikes and, by April 2015, had 70 customers, including such major online retailers as F.ua, MOYO, kniga.biz.ua, eda.ua, and others.
In February 2015 DelFast obtained $250,000 in investment capital from the Imperious Group, a Russian investment fund. With that financing, the company purchased several dozen new electric bikes, expanding its fleet to 65 bikes, and launched a new delivery line in Kyiv.
In May, DelFast expanded to Poland, where local entrepreneur Andrew Bychkouski provided financing. He now heads DelFast’s Polish office. “Everything is awesome in Poland! We serve pizzaportal.pl (the Polish division of Delivery Hero) and Poczta Polska (Poland’s largest postal operator). In Warsaw, the growth will be more rapid than in Kyiv,” said AIN.UA Danil.
In Kyiv, he said, business is growing by an average of 25% per month. Last summer, the Kyiv branch of DelFast attracted two large clients – “Privatbank” and “new mail.” However, efforts to get another new customer, Rozetka, did not succeed.
In October DelFast diversified its business by launching “Uber call a courier.” The mobile app with the same name allows customers to call a courier to order deliveries within an hour. However, the application has so far been downloaded by less than 1,000 users.
Kwambio – A platform for creating 3D-products
Kwambio is an online platform for designers and users of 3D-printers. Designers can upload their 3D-projects and users can change the appearance of images to their taste and print them on their devices. The company earns commissions of 30% on the sale price of each model.
This service was launched in October 2014 by two Ukrainians, Volodymyr Usov and Dmytro Kryvoshiy. Already the business has managed to obtain a start-up ranking for 2015. In 2014, Kwambio, like Ecoisme and Looksery, it was one of the winners of the startup contest at the IDCEE-2014. Kwambio’s online platform has obtained investment capital of $500,000 from an Odesa company, whose name has not been disclosed.
Initially, Kwambio planned to release its new service by the end of 2014, but the release was postponed until the summer of 2015. Nevertheless, during that time Kwambio did not sit idle. In April, the Company presented a novelty – a working prototype of a 3D-printer, UNIQUE One. “We followed Apple’s strategy – first we developed our own iTunes, and now we have created our own iPod,” Kwambio’s reported.
In June 2015, Kwambio participated in the summer program of the well-known Boston accelerator, TechStars, and obtained investment capital of $650,000 for development. After its full-scale launch in August, Kwambio moved to New York. Volodymyr Usov explained that the company’s decision to relocate was intended to bring the business closer to its users and partners. The company realized that most of the designers who use its product, as well as the majority of its customers, are from New York. Its 3D-printer, UNIQUE One, is still in the development stage.
This year Kwambio’s ranking rose from eighth to seventh place.
Preply – A service to find local and online tutors
Ukrainian start-up Preply launched a website in April, 2013 and is now in its third transformation. In July 2013, co-founder and CEO Cyril Biga, shared with our readers that he had already invested two years of work on this project. In 2015, after another two years, Preply evolved from an English teaching service to a more ambitious venture, where a user can find a tutor in 12 different languages: from Ukrainian and Russian to Chinese and Arabic.
Preply is an online platform to find a foreign language tutor. With a few clicks, the service can either identify a suitable tutor or place requests for specialists in a foreign language. The service can be used by hobbyists, schools, and even businesses. The user can choose a tutor not only from among local teachers on this platform, but also from online tutors in other countries.
Generally, a student using this service can, after 45 hours of lessons, increase his or her level of knowledge of a foreign language from pre-intermediate to intermediate, and, after another 45 hours, from intermediate to upper-intermediate.
In the summer of 2015, Preply was accepted into the European division of TechStars and obtained a $120,000 investment. The company then moved to Berlin, which, it is said, “gives one access to all of Europe.” In return for the company’s participation in the Tech Stars program, TechStars received a 6% stake in the business, plus a convertible loan of $100 000. In addition, Preply arranged for approximately $100,000 in services from companies like Amazon, PayPal and SendGrid. Getting a start in those famous American platforms likely impressed our experts, who gave the company eighth place.
SOC Prime – Cyber security platform
The creators of SOC Prime are working in a field that has enormous potential and only a low level of competition. In general, the number of professionals working with SIEM (security information management and security event management) is very small. SOC Prime became the first company to build a platform to protect enterprises against cyber threats.
At the helm of the company is Bezverkhy Andrew, who has been a specialist in the area of cyber security for more than six years. The board of directors includes specialists from Germany and Lithuania, who have more than 15 years of experience in this field, as well as the head of venture fund Gravia.vc (an investor in SOC Prime) and Denis Dovgopolyi, the head of Leon Podobedov GrowthUP Group.
Founded in 2014, the company’s operations were active by April 2015. By the end of 2015, the company’s list of clients included such significant businesses as OTP Bank, Starlight Media, UkrSibbank, Volya and Sberbank of Russia.
The company’s future plans include expansion into European markets. It recently announced the launch of a new venture with the Dutch firm Perseptive Security.
UGears – 3D wooden puzzles of mechanical objects
Technical designer Denis Ohrimenko launched UGEars in July 2015. He was able to raise capital from Gennady Shestakov, director of the publishing house “Egmont Ukraine.”
The business was originally called Ukrainian Gears and had planned to make its puzzles from cardboard, but, since a condition of the investment was to make the puzzles from wood, the company modified its product to fit the terms of the investment.
A successful campaign on Kickstarter gave a boost to the company. UGears originally set a campaign goal of $20,000. After the first day of the campaign, it had already raised $24 000. With three days left in the campaign, it had raised a total amount of about $310 000. Thus, UGears had surpassed its original goal by 15 times.
However, to the startup’s founders, the Kickstarter campaign was originally conceived not so much as a way to raise funds, but as an element of an effective public relations and marketing effort. And they achieved all these goals. The company’s products are already being sold in Poland and Germany, and will soon be available in the United States.
Below is an alphabetical listing of the companies participating in the rating process:
- Enable Talk
- Force Emotion
- Serpstat (Prodvigator)
- Settle / AllSet
- Smart Atoms (LaMetrics)
- SOC Prime
- Traqli / Newzmate
- Win Taxi
The list of voting experts:
- Azhnyuk Yaroslav, CEO Petcube
- Natalia Berezovskaya, CEO Detonate Ventures
- Bondarevskiy Peter, co-founder Coppertino
- Vitchenko Alex, Digital Future
- Gadomskii Dmitri, a lawyer in the “Yuskutum”
- Dovgopolyi Denis, managing partner GrowthUp Group
- Dubinskaya Eugene, partner BBG
- Dukach Simon, Managing Director of TechStars
- Kenigshtein Ilya, investor, partner, Hybrid Capital Fund
- Kologrivov Jaroslav, Director General of the Scientific Park “Kyiv Polytechnics”
- Kolodyuk Andrew, founder Divan.TV, managing partner AVentures Capital
- Alexander Kosovan, managing partner SMRK
- Krivorchuk Andrew, Director Chernovetskiy Investment Group
- Kirill Mazur, Partner Imperious Group
- Yaroslav Maksimovic, founder Banner.UA
- Orudzhaliev Arthur, Project Manager AIN.UA
- Palienko Nicholas, founder Prom.ua
- Nikolay Savin, Director GrowthUP
- Igor Semenov, a partner of TA Venture
- Sinitskii Ruslan, founder and CEO of Jelastic
- Eugene Sysoev, managing partner AVentures Capital
- Victoria Tigipko, managing director of TA Venture
- Yuri Chaika, co-founder MonexY
- Victor Shaburov, CEO Looksery
- Shoyfot Igor, partner Happy Farm
- Yakover Maxim, founder and CEO of “Journal”
Editorial AIN.UA thanks the members of the Expert Council for their participation in the project.