By February, Uspacy had established an Estonian entity. "It took us about a half an hour to set it up," said Melnychuk.
Uspacy, a single online workspace helping companies with collaboration and communication, was founded in Estonia by Ukrainian e-residents to support location independent management
For Ukrainians, the full-scale invasion by Russia that began two years ago is a line in time, a dividing point that demarcates everything into a before and after.
Dmytro Suslov, for example, had been the head of a company that distributed the Russian online service "Bitrix24" in Ukraine since 2011. But with the onset of a full-scale invasion, he ceased cooperation with them and lost his job.
His colleague Kyrylo Melnychuk had already left Ukraine earlier, and was running a digital agency from Portugal, but also lost most of his business when the invasion started.
"We thought, we need something new," said Suslov. "We knew this product area and decided that we needed to create a new Ukrainian product," he said. "So it was a very understandable decision."
The product they decided to create is called Uspacy, a single digital workspace that helps companies and organizations communicate, collaborate, and manage their customer relationships. "Just imagine, you no longer need either Slack, Hubspot, or Trello," said Suslov. "You can get it all in one product, in one interface, at one price with one subscription."
Suslov and Melnychuk set up Uspacy in Ukraine in May 2022 and Uspacy went live in February 2023. But there were always plans to incorporate the business outside of Ukraine when necessary, and there were internal debates about where they might be.
Initially, Portugal and Poland were both under consideration, but Estonia appeared as a third contender with a "good tax system and startup ecosystem," Melnychuk said. What gave Estonia added weight was its e-Residency program, which enabled Suslov and Melnychuk to operate and run the business online from Kyiv and Lisbon, just as if they were headquartered in Tallinn.
The paperless, streamlined process of opening and running a company from Estonia also made the country the best option, Melnychuk said. He noted that the program is very well known among the Ukrainian startup community. Melnychuk added,
"We chose Estonia because it was much easier for us to all obtain e-Residency and start our company from that, not from scratch, and not the paperwork needed here in Portugal or in Poland."
Suslov, Melnychuk, and other members of the Uspacy team applied for e-Residency in December 2023 and got their cards delivered in January. In an interesting twist, the team in Kyiv got their cards first, as they were delivered via diplomatic post to the Estonian embassy in Ukraine, while it took a little longer for Melnychuk to pick up his card in Portugal.
"We were just sitting at the service point in the Estonian embassy and took a selfie with our new cards and sent it to Kyrylo, and said, 'ha ha, check out our new cards," recalled Suslov.
The Ukrainian entity continues to exist and employs Uspacy's team in Ukraine, while the Estonian entity is used to pay suppliers in Europe, as well as to attract investments, he noted. The company recently received an investment from Startup Wise Guys, an Estonian VC, and Melnychuk said that the company is looking to close a round of about €700,000 later this spring.
Get to know funding opportunities for e-resident founders:
The company's team of programmers is still mostly based in Ukraine, which remains a wellspring of IT talent and innovation, supported by a mix of entrepreneurial grit born of the economic crisis that afflicted Ukraine and the rest of Eastern Europe in the 1990s, plus the country's strong mathematics programs and free university education.
"We have been able to create a huge batch of new programmers, developers, and managers coming out of our schools year after year," remarked Melnychuk. And while many of these specialists were employed by foreign companies outsourcing work to Ukraine, there have been some success stories. Grammarly, the cloud-based typing assistant, was founded in Ukraine.
And, should Melnychuk and Suslov have their way, Uspacy will be added to that list of names. Since its launch the company has built a community of a thousand active users and is on the road to break even. It sees potential particularly in emerging markets in Latin America, for instance, where customers are "more open to using digital tools to run their businesses," in Melnychuk's words, and they won't face the same amount of competition that they would in older markets like the UK, US, or Germany, though they compete in those markets too.
To reach these markets, Uspacy is developing a network of local partners that can sell its platform to their customers and help to implement it. "That way we spend less on sales and customer support and can also help our partners," said Melnychuk. He said that Uspacy currently has about 100 partners around the world who are working to sell the firm's offering.
And as for Estonia? Well, it's home, in a way. The company had a presence at the annual sTARTUp Day conference, held in Tartu in January, and will be at the Latitude59 conference in Tallinn in May.
Uspacy was set up in Estonia with financial support from e-Residency and Marketplace member Magrat thanks to the ongoing reimbursement campaign for Ukrainian entrepreneurs. Regarding this little boost for Uspacy, Melnychuk noted:
"That was not the reason we chose Estonia as a country of incorporation but it was a nice touch to the overall experience. And as a startup we count every cent, so this reimbursement helped us to attract more customers by spending this money for paid ads."
This initiative has supported over 100 Ukrainian e-resident founders since its inception in March 2022. For these founders, the e-Residency programme has covered the application fee for e-Residency (up to €150) while eligible service providers have covered the company registration fee (€265 for an OÜ).
Learn more about the Ukraine reimbursement campaign and find out if you're eligible.
