Ukraine’s booming IT sector is good news despite the war

A plain Soviet-era office block squats on a residential street in the beautiful historic city of Lviv, Ukraine. The lobby is dimly lit and there is no seating, only a stern guard who points to the elevator to access local software engineering firm N-iX.

The doors part and the offices are an orange and white oasis, with lofty ceilings and light and young people working at clusters of desks.

This is Ukraine, a country of stark contrasts. Old Ukraine is stuck with antiquated businesses, methods, and corrupted leaders. New Ukraine is sunny, prosperous, and talented despite war in the east and scandals galore.

N-iX, for instance, employs 200 talented and world-class software developers who are working on projects around the world in offices in Lviv, Stockholm, and Sofia. I met its CEO and founder, Andrew Pavliv, in Silicon Valley two years ago and visited his operation in 2015.

“We are very proud of our company and our projects,” he said.

And he should be. He and the rest of the IT sector in Ukraine have become Europe’s largest software development industry. There are 100,000 Microsoft certified software professionals in the country and aggressive plans to double this number by 2020.

N-iX is rooted in Lviv but its market is global. Its cool offices could be in San Francisco or New York City and its workforce is just as brilliant. Walls are decorated with irreverent cartoon figures, funny quotations, and many flags representing their multinational clients.

There is also a large attractive kitchen and eating area, a gym, and recreation area with foosball and other games to provide a gathering place and break from intensive projects in multiple time zones.

During a tour of the premises, N-iX spokesman Halyna Dumych said that “Ukraine is now fourth in the world in the number of IT professionals after the United States, India, and Russia.”

Sanctions have cost Russia IT business and many have opted for Ukraine instead. In other words, Ukraine is winning the IT “war.”

Three recent and significant deals have turned the tech world’s attention toward Ukraine. In September, Snapchat paid $150 million to buy a two-year-old Ukrainian startup in Odesa called Looksery. The previous record was $45 million paid by a Google mobile division for Viewdle.

In November, financier George Soros made a big bet when his Ukrainian Redevelopment Fund acquired a stake in Ciklum Holding Limited in Kyiv, a successful IT firm with 2,500 professionals. “It is a very dynamic company in an industry that represents the future of Ukraine,” said Soros.

Analysts estimate that there are more than 2,000 startups in the country’s major cities. And some have already made their mark. Ukrainians are behind global success stories such as Grammarly, an online writing enhancement software, and Paymentwall, an online platform dedicated to selling digital goods and services.

Both those companies, like 100 other multinationals, have huge research and development operations in Ukraine such as Siemens, Samsung, Oracle, Cisco, SoftServe, Procter & Gamble, and Bioclinica.

Ukraine’s IT sector is proactive and is determined to transform the country from the world’s bread basket to the world’s “brain basket,” says Yevgen Sysoyev, managing partner of AVentures Capital in Kyiv.

In February, he published “IT Ukraine” that listed the sector’s growing achievements and impressive client base. To reach its goal of 100,000 more IT professionals with proficiency in English by 2020, the sector is signing on universities, local governments, and companies.

For instance, the Lviv IT Cluster, an organization run by Stepan Veselovskyi, has linked three universities, the city council, and thirty-four companies to build incubator facilities, host a large conference annually, and develop IT House, the first of several seventy-two-unit condo buildings on low-cost city land to help IT professionals relocate from war-torn areas or smaller centers. The first building sold out immediately last year.

There is a distinctive Ukraine advantage: A pool of talent well-versed in math and sciences, a desire to get ahead, and a competitive advantage for export of services because salaries are 40 percent to 50 percent lower than in the West. To boot, these companies are paid in foreign currency.

Young people are flocking to the industry because an IT software developer is the “highest paid job in Ukraine,” said Dumych. For instance, she said a railway engineer in Britain makes 1.5 times more than an IT software developer there, but in Ukraine a software developer makes 15 to 20 times more than a railway engineer.

Kyiv and Lviv are the main centers of activity but a robust tech sector exists in most of the country’s cities. But Lviv is growing quickly because of its location, furthest from the violence in the east, as well as just three hours flight from Vienna or Warsaw.

“The headlines look bad, but this is an exciting time for entrepreneurs,” said Lenna Koszarny, CEO of private equity firm Horizon Capital in Kyiv with hundreds of millions invested in the country in many sectors. “We are bullish about Ukraine.”

First published Atlantic Council website Feb. 26, 2016

About author:

Diane M. FrancisSenior Fellow Atlantic Council Eurasia Section, Adjunct Faculty Singularity University in Mountain Vie the National Post in Canada, Professor at Ryerson University, author of 10 books

Source: huffingtonpost.com

Black Iron: Suspensions Lifted on the Shymanivske Project

TORONTO, ONTARIO–(Marketwired – March 22, 2017) Black Iron Inc. (“Black Iron” or the “Company”) (TSX:BKI) is pleased to report that the Company has received written notice from the Dnepropetrvosk Ecology Department (the “Ecology Department”) that the suspensions on exploration activities imposed by the Ecology Department on the Company’s Shymanivske project in 2011 and 2012 have been lifted.

Matt Simpson, Chief Executive Officer of Black Iron, commented: “We have always believed that the basis for these suspensions were unfounded and we are glad to see Ukraine’s new government taking action to resolve such suspensions and support international investors. It is refreshing to see support from multiple levels of government to bring the Shymanivske project into production. In addition to the suspensions being lifted, the Kryvyi Rih City Council has held public hearings in support of initiating a process to lease to Black Iron surface rights for the land covering the Shymanivske project (see press release dated January 23, 2017). In the near term, the Company expects to receive a positive decision from the Kryvyi Rih City Council authorizing Black Iron to develop a detailed land allotment plan for the Shymanivske project, as required by Ukrainian law, prior to signing a lease agreement with the city of Kryvyi Rih for the Shymanivske project surface rights.”

With iron ore prices holding strongly at approximately US$90/T coupled with Ukraine’s heavily depreciated currency, Black Iron believes the pieces are coming into place to bring the Shymanivske project into production.

About Black Iron

Black Iron is an iron ore exploration and development company, advancing its 100% owned Shymanivske project located in Kryvyi Rih, Ukraine. The Shymanivske project contains a NI 43-101 compliant resource estimated to be 645.8 Mt Measured and Indicated mineral resources, consisting of 355.1 Mt Measured mineral resources grading 32.0% total iron and 19.5% magnetic iron, and Indicated mineral resources of 290.7 Mt grading 31.1% total iron and 17.9% magnetic iron, using a cut-off grade of 10% magnetic iron. Additionally, the Shymanivske project contains 188.3 Mt of Inferred mineral resources grading 30.1% total iron and 18.4% magnetic iron. Full mineral resource details can be found in the NI 43-101 compliant technical report dated January 24, 2014 titled “Feasibility Study of the Shymanivske Iron Ore Deposit for Black Iron Inc.” under the Company’s profile on SEDAR at www.sedar.com. The Shymanivske project is surrounded by five other operating mines, including ArcelorMittal’s iron ore complex. Please visit the Company’s website at www.blackiron.com for more information.

The technical and scientific contents of this press release have been prepared under the supervision of and have been reviewed and approved by Matt Simpson, P.Eng, CEO of Black Iron, who is a Qualified Person as defined by NI 43-101.

Forward-Looking Information

This press release contains forward-looking information. Forward-looking information is based on what management believes to be reasonable assumptions, opinions and estimates of the date such statements are made based on information available to them at that time, including those factors discussed in the section entitled “Risk Factors” in the Company’s annual information form for the year ended December 31, 2016 or as may be identified in the Company’s public disclosure from time to time, as filed under the Company’s profile on SEDAR at www.sedar.com. Forward-looking information may include, but is not limited to, statements with respect to the Shymanivske project, the Company’s ability to obtain the requisite land rights for the Shymanivske project, the impact of Ecology Department lifting the suspensions on the Shymanivske project, the ability of the Company to bring the Shymanivske project into production and its impact on the Company and its shareholders, and future plans for the Company’s development. Generally, forward looking information can be identified by the use of forward-looking terminology such as “plans”, “expects” or “does not expect”, “is expected”, “budget”, “scheduled”, “estimates”, “forecasts”, “intends”, “anticipates” or “does not anticipate”, or “believes”, or variations of such words and phrases or state that certain actions, events or results “may”, “could”, “would”, “might” or “will be taken”, “occur” or “be achieved”. Forward-looking information is subject to known and unknown risks, uncertainties and other factors that may cause the actual results, level of activity, performance or achievements of the Company to be materially different from those expressed or implied by such forward-looking information, including but not limited to: general business, economic, competitive, geopolitical and social uncertainties; the actual results of current exploration activities; other risks of the mining industry and the risks described in the annual information form of the Company. Although the Company has attempted to identify important factors that could cause actual results to differ materially from those contained in forward-looking information, there may be other factors that cause results not to be as anticipated, estimated or intended. There can be no assurance that such information will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward looking information. The Company does not undertake to update any forward-looking information, except in accordance with applicable securities laws.

Contact Information:

Black Iron Inc.
Matt Simpson
Chief Executive Officer
+1 (416) 309-2138