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2019 venture results for Ukraine

Ukraine is gradually quarantining due to the COVID-19 pandemic, and I decided to transfer some of my publications to Habr. This material has been prepared specifically for Startup Jedi - online media about startups and investments.

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Let's try to figure out what happened and how it might affect the future. In our article, we will consider the investments, purchases, and scandals that tech companies in Ukraine lived in.

Investments


In 2019, there were more than a dozen major investment agreements in which companies with Ukrainian roots participated (this is the specifics of the market: you can not talk about completely Ukrainian startups, since the vast majority, if not all, are incorporated in Estonia, Israel, the United States or other jurisdictions outside Ukraine).
Gitlab

In the first place in terms of attracted investments is the project with Kharkov roots Gitlab, which received $ 268 million in 2019. The product of the project is an online service for developers, which allows them to work with common code and its versions from around the world. Its founder Dmitry Zaporozhets attracts money to the company for the second year in a row, and the last valuation was $ 2.7 billion, which makes the project a Ukrainian “unicorn” (looking a little ahead, we note that this is not the only “unicorn” on our list). In its history, Gitlab has already attracted a total of $ 426 million in investments, and the number of customers is tens of thousands. The plans for 2020 include access to the stock exchange, which will be a logical step for the development of the company.

Grammarly


The second step in the ranking is Grammarly. The company's product corrects contextual spelling errors, corrects standard grammatical errors, offers more appropriate lexical options, provides a number of versions of common quotes and sentences. In 2019, the project attracted $ 90 million in investment from two US venture capital funds - IVP (Institutional Venture Partners) and General Catalyst. This is not the first money that these two funds invest in Grammarly - in the first round of investments in 2017, when $ 110 million was received, in addition to them, Spark Capital, SignalFire and Breyer Capital participated in the transaction. After this round of investment, Grammarly's valuation also exceeded $ 1 billion, making this company the second “unicorn” on our list.

People.ai


Last year, People.ai, founded by Oleg Roginsky, who was born in the Dnieper, holds an honorable third place in attracted investments last year. The service analyzes the work of sales managers based on email, calls, CRM, instant messengers and helps them work more efficiently. Having studied the work of a specific manager, the program creates individual recommendations for him on how to find new customers and conclude more transactions. This company has attracted $ 60 million from a pool of eight investors led by the private fund IQONIC Capital. The People.ai valuation after this round of investments reached $ 500 million; there is no “half-unicorn” name in the venture capital business (there is a less common name “centaur” for startups with a valuation of more than $ 100 million).

Very Good Security


The next round of investments attracted by a company with Ukrainian roots is almost half as much - $ 35 million in the third round of financing - it has Very Good Security (VGS) from Goldman Sachs and two other funds. The platform avoids hacking risks for corporate clients by moving the infrastructure to the security to the "cloud".

On January 16, 2020, another significant event for the company occurred - the attraction of another $ 15 million from Visa Ventures together with Goldman Sachs, Andreessen Horowitz, Vertex Ventures US, Max Levchin (PayPal co-founder) and Nick Bilogorsky in the Series B round. And let skeptics continue to say that it is difficult to raise money in January.

Ajax systems


And finally, another company related to security, but already physical, Ajax Systems closes the top five investment transactions of the year. The company's products are sensors that allow you to detect hacking of doors, opening a window or moving in a house. The company raised $ 10 million from the Horizon Capital fund. This is the first round of investment in the company of Alexander Konopitsky after the "seed" from SMRK VC Fund in the amount of $ 1 million.

M&A


Among the purchase transactions in the technological sector, several over the past year can be noted, which in one way or another will affect the further development of the market.

In November 2019, it became known about the purchase of Ukrainian Zagrava games, a game developer by Playrix. Obviously, we are talking about strengthening the parent company team. The deal amounted to a "modest" $ 1 million.

Eda.ua, the delivery service, which is now part of the Armenian company Menu Group, changed its owner in July 2019. The amount of the transaction was not disclosed, but experts estimate it in the range of 2.5-5 million euros. It is also known that the new owner plans to invest 100 million UAH in the development of the service.

In May 2019, he changed the owners and the DOC.ua service, which was sold to Effective Investments. Moreover, in January of this year, the company attracted new investments from the Quarter Partners venture capital fund for development in international markets. The amount of the transaction was not disclosed.

In April 2019, the Israeli company Perion bought the Ukrainian company Captain Growth, which, using AI, automates marketing analytics and finds insights. The deal amounted to $ 3.8 million.

In March last year, another Israeli company Yael acquired Acceptic outsourcing company from Kharkov citizen Dmitry Kharchenko for $ 2 million.

Then in March 2019 it was bought by another company with Ukrainian roots of the game development Murka Entertainment Ltd., which was taken over by American Blackstone company for an undisclosed sum, which, according to the known data, can be estimated at around $ 100 million.

Due to large transactions can be recall the purchase in February 2019 of the outsourcing company Ciklum, which became owned by the investment company Dragon Capital.

And the “cherry” on our cake is certainly the success story of Viktor Shaburov, who managed to sell his Snapchat companies twice. In 2015, his company Looksery was acquired for $ 150 million, and in 2019, AI Factory became the property of Snapchat for $ 166 million.

Scandals and intrigues


And for those of you who have read up to this place, we suggest recalling two fascinating stories of the Ukrainian venture market.

In September 2019, it became known that at the Nimses startup, which “rattled” a couple of years ago due to its vision, problems began, both with the team and with raising money. At the same time, difficulties have been observed since the beginning of the year, but they only spoke publicly about them in the fall. Salary delays began in January 2019. At first they were paid off in whole or in part, but by the summer of last year, payments to employees had ceased. There are delays with payments to partners who place their goods on the Nimses platform and sell them for nims, the virtual currency of the system.

On this, the summing up of 2019 can be considered completed if you do not take into account the events that took place in Ukraine: for example, the departure of the management team from Unit.city, the speech of President of Ukraine Volodymyr Zelensky at iForum, as well as transformations in the public sphere related to how with real digitalization, and with “digitalization”, which hardly penetrates even into the corridors of the Ukrainian parliament (there are photos of printed “mountains” of papers with comparative tables of bills on the network).

In the next part, we will get a magic ball and try to look into the future of the venture industry in Ukraine in 2020. Stay with us!

Article author: alexriabtsev , founder of the Startup.In.UA project

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