Startups Under Fire: The Remarkable Resilience of Ukraine’s Tech Sector

In February 2022, Ukraine’s tech sector was booming. Between 2016 and 2021, the country’s IT exports tripled to nearly $7 billion a year, according to the IT Association of Ukraine. Its universities have long been a formidable production line for STEM talent, and thousands of these young graduates helped Ukraine first become Europe’s back office, stocked with developers and designers working for international clients, and then an innovation center in its own right, with a flow of cutting-edge startups: From deep-tech and robotics to translation and AI.

The war should have ended that. Russia’s full-scale invasion has killed or injured tens of thousands of civilians and soldiers, many of them pulled from ordinary lives onto the front lines. Millions have been displaced from their homes and are now scattered across Europe and beyond. Russia has targeted infrastructure, knocking out power and telecoms and threatening to cut Ukrainian businesses off from their customers and backers overseas.

And yet, the tech sector has not just survived but thrived: By the end of 2022, Ukraine’s IT exports had grown nearly 7 per cent, even as the economy shrunk by almost a third. These are the stories of how four startups have survived, but they’re just a sample of the thousands of acts of extraordinary resilience, defiance, courage, and cooperation in Ukraine’s tech sector.

“Music is a very powerful instrument.”

As a PhD student in quantum physics in the dying days of the Soviet Union, Andriy Dakhovskyy would hide bootlegged vinyl of western rock music in his room. “I was lucky not to be caught by the KGB,” he says. “When the Soviet Union fell and you could easily go to a record store and buy Led Zeppelin, something important was missing for me. The feeling of exclusivity, of being underground.”

Dakhovskyy spun his forbidden love of rock into a career, ending up establishing Universal Music’s first office in Kyiv, and becoming a central figure in the development of Ukraine’s music industry in its anarchic post-Soviet revival. He got Elton John onto Ukrainian TV and produced Kyiv’s first rock opera. As we drive through central Kyiv, he points out the nightclub he ended up running, kind of by accident, after being convinced to invest in it by a friend in need of a loan. It’s now closed, battered first by Covid, then by the war.

In 2020, Dakhovskyy launched Djooky with business partners in Ukraine and the US, based on a belief that less well known recording artists—particularly those from outside America—get a raw deal on platforms like Spotify, where only a small number of high-profile musicians make good money. “The music industry is heavily, heavily monopolized and centralized,” he says. “I know the system … and I couldn’t change the system from within.”

Djooky is a marketplace where fans can essentially buy shares in artists, helping them to build a profile, with the potential to profit from their success. When the Eurovision Song Contest was canceled due to the pandemic in 2020, the company launched its own Djooky Music Awards, letting fans vote for their favorite song in a huge multinational competition that attracted artists and listeners from all over the world. The platform has 200,000 registered users, submissions from artists from more than 140 countries, and has held 15 successful auctions.