Comprehensive overview of Ukrainian IT sectors and venture capital ecosystem as of late 2013. Presentation by Yevgen Sysoyev, AVentures Capital at IDCEE 2013.
2. UKRAINE IT UNIVERSE OVERVIEW
OUTSOURCING
• $2B+ in revenue
• 50,000+
engineers
• 500+ firms
• 25-30% CAGR
late 90s
R&D GLOBAL CO
• $ billions created
• 5,000+
engineers
• 100+ centers
• 30-40% CAGR
early 2000s
INTERNET
• $2B local market
• Thousands
employees
• 100+ companies
• 40-50% CAGR
SOFTWARE
• $1B worth total
• Thousands
engineers
• 1,000+ startups
• 50-100% CAGR
mid-late 2000s
2
3. SOFTWARE OUTSOURCING
Premier outsourcing destination
High quality engineering pool
#1
Top30
in CEE by
# developers
and $ volume
2008
2010
2011
2013
outsourcing
destination by
2nd
Gold
20%
most certified
IT professionals
in the world
4th
Silver
Top10
cheaper development
versus Russia and
Belarus
2013
2011
2012
2013
2012
2013
1st
2nd
Finalists
Outsourcing volume over the next 3 years
$4B
$2B
2013
2016
3
4. 100+ R&D CENTERS IN UKRAINE
AMERICA
EUROPE
CIS
ASIA
750 ppl
300
300
1100
600
150
250
150
250
100
200
100
4
6. CONSUMER INTERNET
$2B
1.8%
market
penetration
Electronics, apparel and ticketing are
the major categories
5x rise over the next 5 years
($USD B)
4.6%
11
10.0
10
9
eCommerce, $B
8
5%
Other
Online/Total sales, %
7
4%
Air
3%
1.8%
1.5%
3
1.5
2.0
2%
Phones
Events
Appliances
0
0%
2010 2011 2012 2013e 2014e 2015e 2016e 2017e 2018e
Online
Hotels
shops
1%
1
Jewelry
Books
Cameras
5
2
Shopping
clubs
Laptops
6
4
Sport goods
Electronics
Other
Other
Apparel Tickets
Auto parts
Personal care
Groceries
Other
6
7. UKRAINE IS NOT RUSSIA
Several $100M+ success
stories, dozens of growing
$20-50M+ companies
$10B Yandex and Mail.ru,
several $1B success stories
Success stories –
mostly global stories play
(“Israeli” model)
Success stories – both local
consumer play and
global $1B stories
Underdeveloped VCs
(first VC funds in 2011,
still only 2 Series A funds)
Developed VC ecosystem,
50+ funds
Large army of high quality
software engineers
• As in Israel, in Ukraine the local market is too small, while big army of engineers is
capable, and is witnessed, to create world class global technology leaders
• AVentures team argues that number of $100M-1B success stories in Ukraine will
increase with the development of VC ecosystem
7
8. VENTURE ECOSYSTEM IN LATE 2013
TICKET
Local
Global
INVESTORS’ GEOGRAPHY
Pre seed and seed
Round A
Round B
Few angels
with local
residence
or roots
FFF is still
predominant
funding method
hundreds deals/year
$15-50k ticket
Several Ukrainian
startups are residents
Number of global
VC funds screening
deals, though only
Intel closed 2 deals
50 deal/year
$15-100k ticket
10-15 deals/year
$1-3m ticket
Screening market,
$5-10M
8
13. DEPOSITPHOTOS: CEE SUCCESS STORY
2016-18: IPO/exit
TOP5 GLOBAL MICROSTOCK
$12m sales
16m photos
$6m revenue,
top-5 globally
Series A
$3m TMT
3m photos
Launch
2009
2010
2011
2012
2013
2014
13
14. KEY TAKEAWAY & CONTACT DETAILS
1. Multibillion IT industry in Ukraine exists today
YEVGEN SYSOYEV
2. Ukraine already plays important role in global
ecosystem
Managing Partner
AVentures Capital
www.aventurescapital.com
ys@aventurescapital.com
3. #1 in CEE and #4 in the world by number of
technical specialists
Twitter @YevgenSysoyev
http://ua.linkedin.com/in/ysysoyev
4. E-commerce market to grow from $2B to $10B in
5-6 years
5. Software companies with R&D in Ukraine can
become global leaders in their niches
6. Venture capital ecosystem is extremely
underdeveloped, yet this is changing fast
7. Many interesting startups
8. At least 2-3 IT companies to go IPO/exit for
“hundreds of millions US dollars” in the next 4-5
years
14