When Russia invaded Ukraine, many tech companies were caught up in the chaos — and now they’re dealing with the fallout. Some U.S. startups, too, became unlikely casualties of war.
While the Ukrainian developers of an NYC-based startup were building street barricades, their app was being removed from Shopify, one of America’s largest e-commerce platforms. The reason? The startup’s co-founder, a recent immigrant to the U.S., was a Russian citizen. And Shopify had recently joined the list of western companies introducing sanctions of their own.
It took two years and around $200K in personal investment for the mixed Ukrainian-Russian team to develop their e-commerce app, Pocketfied. The product entered the U.S. market this January. Just a few months later, the new venture went up in the flames of war.
“We are absolutely devastated,” said Aleksandr Iurev, serial entrepreneur and Pocketfied co-founder, who now lives in New Jersey.
“Every morning, as soon as I wake up, I check if my team in Ukraine is still alive. Now it seems that my nationality has cost us our business.”
The app’s Shopify account was opened by Iurev back in Russia and initially registered with his ID information. After its launch in the U.S., Pocketfied resubmitted documents under a new U.S. legal entity. But Shopify hadn’t updated their registration by the time the war broke out. They removed the app based on Iurev’s passport details.
Another Pocketfied co-founder, Ukraine native Timur Khamzin, who escaped Ukraine shortly before the invasion, also submitted his documents in an attempt to restore the company’s account. The app developers suggested taking selfies with barricades in the background.
Luckily, after 150 tickets and countless requests, the platform finally promised that Pocketfied would be re-uploaded to their app store. A week later, Iurev and Khamzin say they’re still waiting.
Tech on the frontline
Many Ukrainian tech professionals have joined the fight against the invading force, and not just on the frontline. “Our developers volunteered with the Ukrainian IT army, which has recruited over 200,000 people now,” said Andriy Lazorenko, CEO at IdeaSoft, part of the Swedish IT consulting group Sigma. Various groups are also pushing Western businesses to put pressure on Russia.
The startup’s employees were fortunate and managed to escape early. “Nobody really believed Russia would attack, so it was a very unlikely scenario,” Lazorenko explained. But the company prepared an emergency plan just in case. “Now,” he says, “I’m glad we had that plan in place.”
In Kharkiv, where IdeaSoft’s headquarters are based, the bombing started around 5 a.m. There was no warning. Employees rushed to the office with their families, where they boarded company buses for evacuation. “We took around 80 employees and their family members to western Ukraine on the first day of war,” Lazorenko said. “The rest of the team we relocated over the next few days.”
Later, calls from business partners and ordinary people started coming in too. They were disoriented and didn’t know how to get out. So Lazorenko turned his company busses into an ad hoc car caravan, evacuating people from Kharkiv, delivering humanitarian aid on the way back.
IdeaSoft clients have been incredibly helpful as well, and many have paid three to four months in advance, Lazorenko added. By now, he’s evacuated more than 6,000 civilians at his company’s expense. Recently Lazorenko joined forces with other IT entrepreneurs to launch a fund Help Kharkiv. The initiative is providing fuel for drivers, food, medical supplies for the wounded, warm clothing for those remaining in Kharkiv basements, and more.
Productivity at war
Hanna Zubko, Miami-based co-founder of tech company IntellectEU, said she’s been preparing her employees for the possibility of war since December.
“We’ve conducted multiple webinars on how to evacuate and pack an emergency bag,” she said. Zubko was inspired by the story of 9/11. Companies that developed emergency evacuation plans and ran regular practice drills, as it turned out, were able to rescue more people when the time came.
Zubko, who travelled to the U.S. as an exchange student and launched her company at the age of 19, said she received her intelligence from open sources. Articles in the NYT and the WashPost alarmed her, although officials in Ukraine asked people to remain calm. She, too, managed to evacuate her team to western Ukraine, as well as the company offices in Belgium and Portugal.
IntellectEU now has around 265 team members, with 96 remaining in Ukraine. “Our employees are now supporting their extended families, many of whom lost their livelihoods when the war began,” Zubko added. “Several team members have ten or more dependents: we’ve become a lifeline for them.”
According to Zubko, productivity remains high despite the war. “Our people were very responsible, even taking work calls from the bomb shelters in the first days of war,” she said. “The majority were online and working by the beginning of March. But we had to introduce a number of roles outside Ukraine to make sure our clients’ business wasn’t disrupted.”
According to Lazorenko, the sentiment in Ukraine is clear: no business with Russians anymore. “We don’t have Russian clients for now, and if we did, we would cancel contracts,” Lazorenko said. He added, however, that a few of his former Russian clients donated to the fund he created in support of Ukraine.
The war has had a devastating impact on personal relationships within many mixed teams, too. As the weeks wear on, Putin’s propaganda wears down trust between relatives, friends, and colleagues, leaving many with a sense that they’ve been betrayed by people they thought they knew.
When Russian forces attacked Europe’s largest nuclear plant in southeastern Ukraine, one of Pockefied’s developers warned his colleague in Russia’s Voronezh about the fire. He urged him to leave the city due to the risk of radiation leakage. His work friend didn’t believe him, not even bothering to acknowledge the messages.
The city of Kyiv, where the IntellectEU team was based, has a substantial Russian-speaking population — more than 13% at the last census. Reflecting the city’s demographics, the company has many Russian-speaking employees too, explained Zubko.
“Language or ethnicity has never been an issue for our team,” she said. “Everybody understands it’s not a war between them.” Zubko added she is confident that, as a team, they will come out stronger. “We’re all together, and there are some incredible stories of bravery coming from Ukraine every day.”