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Ukrainian Tech Market Overview 2021: 5,000 IT companies, 200,000 tech specialists, low rates

The Ukrainian office of the tech company Beetroot has published a big report about the Ukrainian tech market. The research and analysis are based on Beetroot’s corporate data and the insights collected by numerous organizations, including the Ministry of Digital Transformation, IT Ukraine Association, DOU.UA, UkraineInvest, Beetroot Academy, Kharkiv IT Cluster, and BRDO, to name a few.

AIN.UA has picked the most interesting insights.


Key figures and facts

  • Ukraine enters 2021 with a 20% IT Services market growth rate and over 200,000 tech specialists to meet the increasing global demand for software engineers. About 85% of tech professionals have at least an intermediate English proficiency level.
  • According to various sources, there are between 3,000 and 5,000 IT companies in Ukraine. The government’s Tech Ecosystem Overview lists 1,142 product companies and 858 service vendors in Ukraine. Over 92% of Ukraine’s tech businesses have switched to remote work just a few weeks after the government enforced a strict quarantine.
  • 2019 marked the largest funding rounds in the history of the Ukrainian IT sector. Gitlab, owned by an entrepreneur from Kharkiv, raised $268 million, topping the most massive investments for 2019. Grammarly has closed a $90 million round of funding the same year. People.ai, the predictive sales startup, raised $60 million. The Restream startup, founded in Vinnytsia and incorporated in Austin, USA, has raised $50 million during the Series A round in 2020. Among other Ukrainian startups that have been drawing the global tech scene’s eyes in recent years are Reface (raised $5.5M in 2020) and Looksery (acquired by Snap Inc. for $150M in 2015.)
  • The 2020 Global Outsourcing 100, published by The International Association of Outsourcing Professionals, includes 13 Ukrainian companies and eight companies with Ukraine offices. 68 Ukrainian tech companies made it to the 2020 Clutch Top 1000 list, representing only the top 1% of all B2B enterprises in the Clutch catalog.
  • According to Clutch.co, the prime spheres Ukrainian IT vendors work in are eCommerce, Enterprise, and Finance.

Main Target Markets

According to the Better Regulation Delivery Office (BRDO) report, the export of IT services in 2020 increased by 20.4% against the previous year, totaling $5.03 billion. The tech sector’s growth contrasts with the overall decrease of Ukraine’s goods and services export of 4.6% in 2020. IT is the most exported service in Ukraine, with a share of 8.3% in the country’s $60.4 billion export of goods and services. 

The main clients of Ukrainian vendors remain the United States and Western Europe, including Great Britain and European Union countries. While different sources provide diverse statistics, it is clear that the USA remains Ukraine’s largest R&D partner (45% of research companies).

The EU is the second-largest market, with the UK, Germany, Netherlands, and Sweden as primary consumers. According to the Almega report, the digital skill shortage in Sweden is about to reach 70,000 by 2022. Therefore, the demand for Ukraine’s IT from Nordic countries is growing too, with Sweden and Denmark taking the lead.

More than 100 Fortune 500 companies have chosen Ukrainian IT services. Ukraine is home to more than 100 R&D centers owned by or working with global companies, including Google, Samsung, Siemens, and Huawei. Many of them have significantly expanded the number of employees or/and opened new offices.

Tech Talent Pool Overview: skills, salaries and more

  • The vast majority of tech talent and companies concentrate in Kyiv, Kharkiv, Lviv, and Odesa. Different surveys conducted in 2018-2019 years show that 67% of IT specialists live in Kyiv, Kharkiv, and Lviv, and half of all Ukrainian tech companies are registered in Kyiv. Among the most actively developing midsize tech cities are Ivano-Frankivsk, Poltava, Vinnytsia, Zhytomyr, and Kremenchuk.
  • JavaScript is the number-one programming language in the Ukrainian development community. Over 18% of software engineers use it as primary in 2020, and more than 41% named it their additional programming language. 2020 was the first year when JavaScript has outrun Java. The latter has been experiencing negative dynamics in the last three years, which corresponds to the worldwide trend.
  • Except for JavaScript, the languages that have shown a significant growth rate in recent years include Python (34% growth since 2017), TypeScript (55% growth since 2018), and Kotlin (67% growth since 2018).
  • When it comes to frameworks and libraries in use, React.js, Node.js, and Angular.js are the top three in the popularity chart. .Net and Spring are the closest pursuers.
  • In 2020, the average software developer salary in Ukraine fluctuated between $780/mo at an entry-level and $4,000/mo at a senior level. A mid-career developer typically earns from $1,500 to $2,600 per month, which amounts to 18K-33K USD annually.
  • The average monthly salary of a senior software engineer in Ukraine is $4,000, with this number rising to $4,550 and $5,600+ for the Tech/Team Lead and System Architect roles, respectively.

In terms of hourly developer rates, Ukrainian outsourcing companies typically charge around $25-$40. For comparison, the average outsourcing rates in neighboring Poland and the Czech Republic are $40-$56 per hour and $34-$53 per hour correspondingly.

  • With the median monthly salary of $4,000, senior back-end developers are the highest paid in 2020. The lowest-paid position is Junior Front-End Coder; this specialty’s median salary rate is $730/mo.
  • The most in-demand IT professionals in Ukraine are front-end experts followed by QA, PHP, and .Net developers — their share in the overall number of DOU openings is 35%.
  • Regarding the salary-programming language correlation, Scala developers earn the most ($4,770/mo median salary). Simultaneously, the lowest-paid competency is 1C, with the median salary just under $1,700 per month.
  • C developers are the highest-paid among the Junior specialists, with the median salary in this category reaching $1,200/mo.
  • Developers with less than a year of experience earn around $600 per month. In contrast, the median monthly salary of tech specialists with 10+ years of experience exceeds the $4,200 mark. After the first year of working on one or several software development projects, a programmer will likely get a salary increase of 35-40%. Mature specialists with a professional background of 10 years or more usually receive a lower yearly increase of 5-6%.

The majority of IT professionals (82%) in Ukraine are content with their salary. The level of compensation satisfaction is higher among senior specialists. Over 40% of system architects and tech leads mark their satisfaction level as fully content. Most dissatisfied with their salary are system administrators, support officers, Junior QA, Junior developers, designers, and marketing specialists, making about 18% of respondents in the DOU.UA survey.

Most IT specialists in Ukraine are happy with their work: over 18% find their current projects enjoyable, almost 40% see their work interesting. About one-third of professionals consider their routine rather interesting than not.

What’s next in the field?

Ukrainian IT is skyrocketing despite epidemical and political woes. According to the survey, the tech sector has become a significant contributor to the country’s economy as the 3rd largest exporter of Ukrainian services.

The export volume of the IT Services market has increased by 157% in five years, while the talent pool has expanded by 34% for the same period. According to the PwC forecast, the IT industry’s market size will reach $8.4 bn worth of export and 242,000 tech specialists by 2025.

Diia City, a free economic zone for creative economy representatives that the Ministry of Digital Transformation is working on, offers high prospects to investors. Eventually, it will enable domestic and foreign tech companies to open businesses and R&D centers in Ukraine under simplified procedures, to operate according to the English Law, and pay 10% of distributed profit tax. The project is expected to double the tech market’s size to $11.8 billion and the number of jobs to 450,000.

You can find the full report here.

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