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Kharkiv, the second largest Ukrainian city with a population of almost 1.5 million people, has been known for a high concentration of the country’s best minds. It was Kharkiv where the first USSR atom disintegration happened in 1932 and where one of the oldest universities of Eastern Europe was founded. It is a powerful education and industrial center of Ukraine and Eastern Europe. In StartupBlink’s 2019 report, Kharkiv ranked 4th in Ukraine and 435th globally.
The startup ecosystem in the city is evolving rapidly, supported by startup founders, students and entrepreneurs. Let’s take a look at some of the most successful startups in Kharkiv, and the advantages and disadvantages of starting up in the city…
The most successful Kharkiv startups
- Many software developers all around the globe are familiar with GitLab (@gitlab), a web-based repository service, which provides cloud storing facilities and hosting. This open-source solution was created by Dmitriy Zaporozhets from Kharkiv in 2011. Ashton Kutcher invested $1.5 in the startup. GitLab services are used by hundreds of thousands of companies, among which there are such giants as NASA, Alibaba, CERN and O’Reilly Media.
- Nezabarom.ua (@nezabarom_ua) is a popular portal for tourists, which offers an online booking service. Kharkiv citizen Dmitriy Skripchenko founded the company, wishing to kickstart the project that would give people possibilities for planning vacations. Outdoor recreation lovers may find lots of useful information on the site, which covers many travel destinations that are in demand among Ukrainian tourists.
- eCozy (@eCozyEurope) is Ukrainian-German project, started by Andrey Kholodov in 2013. It raised angel investments the same year, and in 2014 successfully raised funds on Indiegogo. eCozy team is working on the system of “smart” thermostats with touchscreen control, as well as the control center and application for iOS and Android. Thermostats are attached to radiators and control their temperature and allow saving up to 30% of the rate for heating.
Advantages of Kharkiv as a startup city
- Education and passion for startups: There are more than 60 higher educational establishments in Kharkiv, and it is considered a city of students, who have always been on the frontline of significant changes and innovation in all spheres of science and arts. Young people are literally packed with ideas that are waiting to be materialized.
- Abundance of talent: Kharkiv is a well-known European IT talent pool, which is full of skilled and young specialists. Besides, more than 300 local IT companies and providers in the fields of IT, education, development, hosting and other services operate here, so the enthusiasm is supported by talent. Kharkiv’s outsourcing forces are mushrooming faster than Kyiv’s. Many American (Erminesoft) and Western European software development companies have development centers located in Kharkiv. Many outsourcing companies later take the line of their own product direction.
- Low living costs: Combined with well-developed transport infrastructure, the low cost of living makes the introduction of startups in Kharkiv an attractive prospect. Ukrainian IT specialists are highly demanded all around the globe due to the first quality of their work in combination with affordable rates. If an American developer will ask for $60–$150 per hour for his work, his Ukrainian colleague would ask $20-50 per hour.
- Promising direction of development: Kharkiv was included into Top-10 of Eastern European Cities of the future, according to FDI Rankings of 2015 and gained the 1st place in Top 10 Large European cities for the future in terms of cost-effectiveness, according to http://www.fdiintelligence.com/
Disadvantages of Kharkiv as a startup ecosystem
- Lack of financial support: Although recently Ukraine and particularly Kharkiv has been becoming more and more fertile ground for startups, there is still some lack of financial and credit support for small business.
- Lack of support from the government: Ukrainian legal background still has drawbacks, since small and medium-sized entrepreneurship does not obtain sufficient support from government and taxes are sometimes too high.
Startup Organizations in Kharkiv
Startup Club is a space that unites many skilled specialists in IT sphere and more. In March 2016 it a range of Startup crash tests was conducted. You may stay tuned and follow http://weekly-it.com/events/ to see what events are planned for the nearest future.
IT Talk, launched by DataArt company, it welcomes anyone who feels its association with IT sphere to participate in events, be a spokesperson and listen to others.
Artificial Intelligence club is functioning in Kharkiv, uniting developers, scientists, teachers, and students, who are into multiple aspects of artificial intelligence. Its organizers are Alexander Konduforov and Nikolay Pavlov; currently, 286 members are registered in the club.
KarazinStartups is a Business School of Innovation for creative and active students, which functions on the base of Vasyl Karazin Kharkiv National University. The main goal is to engage students to participate in scientific life by developing their own projects.
Startup/IT events in Kharkiv
The Startup Night: KNURE kindly furnished place for a great event, arranged for IT specialists and future startup founders. Participants from various countries share their experience and speak on how to turn an idea into project, what to begin work with, how to create an attractive presentation and winning project bid, how to win funding and how to work as a team, which issues are often faced by a burgeoning entrepreneur, and how to overcome them. The mission of the event is the development of startup movement in the region, as well as the search for fresh ideas and launching innovative projects in Ukraine.
Kharkiv startup factory: This project, aimed at support of talented youth in the IT sphere, was launched in October 2015. The aim of it was to give guidance for the creation of business to young people. Twenty of the best teams would receive training from Ukrainian and international mentors and successful businessmen, including Silicon Valley representatives. It is planned to assign an individual mentor to every business idea, generated by Kharkiv youth.
“First Capital” Startup Center: It is the first in Ukraine regional interuniversity startup center, created as part of European project TEMPUS SUCSID. The following events have been recently held on the base of the Center: “Khakaton-1654” project development event, Summer School for future startuppers “First Capital”, Microsoft Azure Ukrainian Community meetings, Retail Big Challenge conference and crash tests of start up projects in the course of International Student Contest of advertising and PR projects.
Jewish Smart Community Kharkov: This organization gives support to many smart initiatives. As for recent events, a great seminar is planned to be held here. It’s called “Startup Trade fair”, where one will be able to present their projects and attract possible investors and to win the grant for startup implementation. The participants will also be able to produce ideas, receive an expert evaluation of their projects, get advice from professionals regarding the efficient implementation of ideas and projects, as well as their advancement with the help of marketing instruments, adequately assess risks, get inspiration for further development and establish useful business connections.
Coworking spaces in Kharkiv
Fabrika.space is a hub that invites people who want to share their ideas. It combines the functions of the bar, restaurant, coworking zone, and space for business event conduct. This building had been earlier used as a vegetable processing factory. Though it was reconstructed later, it still keeps a specific atmosphere and extravagant look. On the base of Fabrika, Startup Crush Tests are held.
Novoemesto (@novoemesto) is a loft, which opens its doors for anyone who wishes to work and meet new interesting people. The lodgment is equipped with individual and team working places, comfortable kitchen, cozy sofas, libraries, and office machinery. Wire and wireless Internet connection is supplied.
Spalah is one of the best meeting places in the city. This educational hub, located in the picturesque historical center of Kharkiv, attracts crowds of creative and talented people, who meet and get acquainted with each other. Almost every day something exciting happens here – workshop sessions, presentations, lectures, film shows, discussions, etc. A large lecture hall, four soundproof rooms for 30 persons each, coworking areas, library, and kitchen-lounge zone favor creating of productive and comfortable ambiance.
Significant sources to read about Kharkiv startup ecosystem
DOU is the largest Ukrainian community of software developers and complementary specialists. The portal contains piles of information concerning IT and startups, including trainings, educational articles, blogs, news, forums, vacancies, statistics, etc.
AIN.UA is the largest portal, dedicated to Internet business in Ukraine, where one may find all hot news regarding startups, businesses, social and political events, etc. The web site has rubrics, dedicated to social media, vacancies, bright advertisements and innovations in the sphere of online marketing and Internet business.
Being a city with an abundance of innovation and IT talent, Kharkiv has the makings of a favorable startup destination. With more legal and financial support, it can certainly evolve into an important startup hub.
About the Author
Erminesoft team is an American company, which provides mobile development services for startups and small businesses, namely iOS, Android, React JS development and UI/UX design. Read their story here. Their development center is located in Kharkiv – a city of young people and skilled IT specialists.