Editor’s Note: This story is from the special 30th Independence Day edition of Kyiv Post. Find it online or pick up a copy in Kyiv.
Ukraine’s tycoons acquired fortunes in energy, real estate, agriculture and retail.
In 2021, the combined net worth of the top 100 richest Ukrainians, including oligarchs Rinat Akhmetov, Victor Pinchuk and Ihor Kolomoisky, was over $44 billion — almost $13 billion higher than the year before and a sum that represents more than a quarter of the nation’s annual output.
But most of Ukraine’s wealthiest do business in an old-school way, working in traditional industries and often wielding political and media influence to protect their business interests.
A new generation of entrepreneurs is trying to do business differently. With less money and fewer connections, they transform existing industries and create new ones.
Transforming retail with virtual trading
Ukrainian tech entrepreneur Vlad Panchenko launched a marketplace to trade goods from video games. Called DMarket, it allows gamers to sell, buy and exchange skins — virtual add-ons like clothes and makeup that modify the look of game characters.
Gamers spend thousands of dollars to customize their avatars. A pair of colorful virtual gloves for the computer game Counter-Strike costs nearly $1,300 on DMarket. Panchenko estimates the market into the billions of dollars yearly. Experts predict that more people will buy skins as the number of gamers goes up every year, expecting to surpass 3 billion people by 2024.
On DMarket, players can buy virtual items for cryptocurrency. Gamers who use cryptocurrency are riskier and spend more on skins, according to Panchenko.
Founded in 2017, DMarket is not profitable. To fund his team of over 80 people, Panchenko attracted $7.2 million of investment from Ukrainian fund Almaz Capital and raised $25 million in initial coin offering, or ICO, the process of crowdfunding via cryptocurrency.
A year ago, it was hard to convince investors that DMarket was worth their money, Panchenko said. Now, many big tech firms show interest in funding the so-called metaverse, a virtual world that exists in games.
Panchenko believes that his idea has a big future.
“I am a dreamer. A virtual world for me is a place with unlimited possibilities: you can build a castle there, defeat a dragon or create a planet. Besides, you can do it with your friends,” he said.
From left to right: Stanislav Dmitrik, cofounder of Ukrainian delivery service Rocket; Dmytro Shvets, cofounder of tech startup Reface, Vlad Panchenko, CEO and founder of DMarket, a marketplace to trade goods from video games, give a speech at the conference organized by Forbes Ukraine on June 3, 2021, in Kyiv.
Transforming energy with portable chargers
Entrepreneur Hanna Osypenko has turned a traditionally cumbersome energy business into a handy device — a shared power bank that people can rent to recharge their electronic devices.
Called Power Now, her company has already installed over 800 charging stations in Kyiv and big cities across Ukraine such as Dnipro, Lviv, Chernihiv and Vinnytsia. The goal is to install 1,500 stations by the end of 2021.
Power Now works like electric scooter-sharing services. First, users find the closest Power Now charging station via the app; then they scan a QR code on the portable charger and use it until the device is fully charged. Half an hour of rent costs 40 cents, the whole day — $2.
Power Now is a win-win for both users and businesses that have charging stations placed on their premises. Portable chargers help restaurants and shopping malls to attract new visitors and get rid of crowds sitting next to plug sockets.
In Ukraine, nearly 55% of its 42 million population use smartphones today compared to 7% in 2011. Most of the users are people under 30 — they are usually the ones who move around the city with their gadgets and need them recharged.
Launching a power bank sharing service in Ukraine was risky because people are reluctant to accept innovations quickly, Osypenko said.
To test the business model, she invested $200,000 of her own money, then attracted $700,000 from local investors.
The number of Ukrainians using Power Now increases by 10,000 people every month and is expected to go up because even the newest devices still need at least one full charge a day.
“Sharing economy is becoming more popular,” Osypenko said. “Young people love to have everything and own nothing.”
A power bank rental service Power Now works like electric scooter-sharing services. First, users find the closest Power Now charging station via the app; then they scan a QR code on the portable charger and use it until the device is fully charged. (Powernow/Facebook)
Transforming real estate with futuristic hotels
Compared to ordinary hotels furnished with queen-sized beds, minibars and extravagant chandeliers, Ukrainian hotel Monotel offers its guests a contrasting experience of staying in a capsule the size of a single bed.
The capsule contains everything necessary to satisfy a traveler’s needs — fast Wi-Fi, lights, sockets, fresh sleepwear and even a TV.
The idea of the project is to take maximum comfort from the minimum space, according to Monotel founders Osypenko and Ksenia Chigarkina.
Monotel is the golden middle between expensive luxury hotels and cheap jam-packed hostels. One night in Monotel in Kyiv’s downtown costs nearly $15, compared to nearly $60 in a four-star hotel.
Capsule hotels are booming across Asia, especially in Japan, China, Taiwan and Singapore. The global capsule hotels market is expected to reach $226 million by the end of 2022 as youth prefers to stay in minimalistic high-tech spaces rather than luxurious hotels.
Monotel allows its guests to open the locker with a fingerprint and pay for the stay with cryptocurrency. Osypenko returned the investment in the first hotel in a year and now sells its franchise for $15,000 in popular tourist destinations — Lviv and Odesa.
According to Osypenko, Monotel was 100% full even during the COVID‑19 pandemic. Some people, she said, stayed there for over three months: Having a comfortable bed at night and a clean shower in the morning seemed to be enough for them.
Ukrainian hotel Monotel, founded by Hanna Osypenko and Ksenia Chigarkina, offers its guests to stay in a capsule, instead of a regular room. The capsule contains everything necessary to satisfy a traveler’s needs — fast Wi-Fi, lights, sockets, fresh sleepwear and even a TV. (Monotel/Facebook)
Transforming food industry with greens
To make plant-based sausages and pate that are tasty and juicy, Ukrainian brand Zelena Korova (Green Cow) uses tofu, a cheese-like product made of soybeans. For 300 grams of vegetarian sausages, customers pay nearly $10 — almost as much as for meat products.
Zelena Korova is among the few businesses in Ukraine that sell plant-based meat, as well as hummus, falafel and different varieties of tofu, in big supermarket chains such as Auchan, Silpo and Varus.
Plant-based food is becoming more popular in Ukraine and even those who eat meat are willing to try it, according to Daria Yaremchuk, the founder of Zelena Korova and the owner of vegetarian cafes “Green” and “Little Green” in Lviv, a city of 720,000 people, 540 kilometers west of Kyiv.
Nearly 90% of Ukrainians who buy plant-based meat are not vegetarians, according to the surveys. Ukrainians usually eat plant-based food for ethical, environmental or medical reasons.
The global plant-based food industry is now worth over $7 billion and is expected to reach $74 billion by 2027. In Ukraine, this market is still small, but brands like Zelena Korova continue to emerge, aimed to change the game.
For Yaremchuk, plant-based food is more than a business — it’s her lifestyle. She became a vegetarian and started to meditate when she went through hard times in her life.
“I really wanted to share the knowledge I acquired and the positive energy with other people, so I opened a cafe,” she said.
When Yaremchuk opened her first vegetarian cafe in Lviv in 2014, she didn’t have much money, but the business survived due to the big demand and no competition.
“People were waiting for us for so long that on our first day we couldn’t find an empty chair!” she said.
Ukrainian entrepreneur Daria Yaremchuk and chef Vadim Khrebtov cofounded a company that sells plant-based food in Ukraine. Called Zelena Korova, it uses tofu, a cheese-like product made of soybeans to cook plant-based sausages and pate. (Zelena Korova/Facebook)
