The future of Ukraine is tech investment
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The future of Ukraine is tech investment
Jari Worsley
Ava Maitland
22 June 2023
7 min read
Jari Worsley
Ava Maitland
22 June 2023
7 min read
We had the privilege this week of attending two events as part of the UK Government's newly announced plans at the Ukraine Recovery Conference (URC) launching a UK-Ukraine TechBridge initiative to support the tech sector in Ukraine, along with business reception at Mansion House to mobilise the international community to help secure Ukraine's long-term economic future. At the TechBridge Launch, we were asked to follow the Minister of State, Nursrat Ghani's speech to showcase Rozdoum as a successful case study of why businesses can and should invest in the Ukrainian tech sector. We felt a real sense of pride in conveying such a positive message from The Adaptavist Group in front of an influential crowd of UK and Ukrainian diplomats, ministers and leaders from the tech and finance world. Here is the story we told.
Rozdoum and Adaptavist have worked alongside each other as leading partners in the same Atlassian ecosystem for many years. We were in in-depth discussions about Rozdoum becoming part of The Adaptavist Group before Russia's invasion. They were an obvious fit for our business in terms of skills and experience. We know that the question could be asked why we continued with the acquisition after the war began, and the answer is simple. Investments in the tech sector are not about physical assets, and acquisitions for The Adaptavist Group have always been about finding talented people with a shared value system and ethos, a business model we value and admire and which will complement our existing business. The resilience and strength of the Rozdoum team, under the leadership of Andriy Dekhtyar, was apparent to us from the outset of the war, and we were determined to continue as planned and bring them into The Adaptavist Group. We are proud to have them as a part of our business today.
From a legal standpoint, acquiring Rozdoum was, in many ways, no different from other acquisitions we have completed; each has its unique set of challenges and laws to navigate. As the first company under the Diia City regime to be acquired by a foreign company, Rozdoum remains a unique acquisition and has since been championed by the Ministry of Transformation in Ukraine as evidence that the Diia City regime is attracting international investment. Diia City was an initiative set up in Ukraine by the Ministry of Transformation just two weeks before the war started as a virtual incubator for IT companies providing tax breaks and flexible employment laws with the intention of pioneering Ukraine as Europe's largest IT hub. This ambitious plan was not without a strong foundation; Ukraine is teeming with start-ups and tech companies that have long been known to service many Fortune 500 companies worldwide.
Acquiring a company in a country at war is not without challenges. However, it is possible and, in fact, very much achievable. For example, Limitations that were introduced at the beginning of the war, such as the inability to register new shareholders in a company, have already been lifted, and so the acquisition process will already be far more straightforward than it was six months ago. However, Ukraine is, in fact, very progressive and digitised compared to many countries, with e-signatures being commonplace, and this removed what could have been barriers for us.
The tech industry in Ukraine offers great opportunities driven by extraordinary talents, ingenuity and determination, so UK businesses should not be deterred from investing. Ongoing investment in Ukraine's tech sector is fundamental to the country's ability to rebuild. The Adaptavist Group's acquisition of Rozdoum has been an excellent business decision. Rozdoum continues to grow as a profitable business, a great testament to the strength of our Ukrainian colleagues, of whom over 80% still live in their country today. We have no plans to withdraw or even reduce Rozdoum's operations in Ukraine, only to expand our existing presence in the country and upscale its presence in Europe. We said this confidently, knowing that the Ukrainian tech sector is currently the nation's only growing export industry, with an astonishing 5.8% growth last year, according to the IT Ukraine Association and that 85% of Ukrainian tech companies have resumed their pre-war activities.
Jari explained where we plan to take Rozdoum going forward and that recovery during the war had been a concern that Andriy had also raised, that we cannot wait for the war to end to start the process. Beyond the phenomenal talent, skills and expertise of our Rozdoum colleagues that serve our customers and our internal business structures, their resilience, work ethic, and strength continue to inspire colleagues. We hope, in turn, we have provided a sense of stability and support for our new colleagues and their families by being a part of the wider Adaptavist family. It is this spirit that made six of our colleagues drive trucks of humanitarian aid, generators and IT equipment to the Polish border to meet with our colleagues earlier this year.
In Ukraine, the tech sector has proven to thrive against the toughest backdrops. With the ability to work remotely and service companies and clients worldwide, our colleagues in Ukraine continue to perform and deliver despite the war. We are determined that the success of Rozdoum will help encourage more acquisitions and investment by UK companies in the future of Ukraine's tech sector, which can support its growth and contribute to the broader economic recovery of Ukraine.
We asked the audience if they had just one takeaway from what we had shared: let it be that investing in Ukraine and acquiring a company in Ukraine can be an excellent business decision and a very achievable investment. It was an incredibly inspiring evening and an honour to be involved. We are grateful to Simon Haighton-Williams for persevering with bringing Rozdoum into The Adaptavist Group and, in doing so, providing us with a successful case study in the Ukraine tech sector to now inspire other business leaders.
Written by
Jari Worsley
Head of Product
Ava Maitland
Senior Legal & Business Affairs Counsel
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