Boosteroid founder and CEO Ivan Shvaichenko is a prime example of how Ukrainian private companies play a pivotal role in the nation’s David-versus-Goliath battle against Russia’s far superior military force and whose inherent dynamism allows them to leapfrog conglomerates like Alphabet, Amazon and Microsoft in innovation and applied technology.
In a little more than seven years, Kharkiv native Shvaichenko, 40, built his Kiev-based Boosteroid cloud game-hosting company into the third-largest in the world after XCloud and Japan’s Sony PlayStation Cloud Gaming, with operations throughout the United States, Canada and Europe.
The 85 employees of Boosteroid – like everyone in Kiev and Kharkiv – come into work every morning notwithstanding nightly air-raid sirens and voice warnings of incoming Russian ballistic missiles and drones. The streets of Kiev and Kharkiv are as busy and vibrant as before the war, the only difference being that the locals are as grumpy as young parents with colic infants.
Boosteroid’s success most recently culminated in signing a 10-year partnership agreement with Microsoft pushed through by no less than its president and vice-chairman, Brad Smith.
On top of its market share in North America and the European Union, Boosteroid is in the process of opening in the Central Asian markets of Kazakhstan, Uzbekistan and Azerbaijan; Africa’s most populated nation Nigeria; and the growing consumer market of mineral-rich Indonesia.
In fact, Shvaichenko’s stated goal is to bring Boosteroid, now with a market value of between US$500 million and $1 billion based on fair market value, to Nasdaq.
“It’s not if but when,” Shvaichenko said regarding a US Nasdaq listing of his company that he describes as the Netflix of gaming.
Even with daily missile attacks, Shvaichenko and his legal team headed by Vladyslav Kosmin and Artem Skoryi were instrumental in persuading EU Competition Commissioner Margrethe Vestager to green-light Microsoft’s $70 billion acquisition of Activision Blizzard that US Trade Commission chairwoman Lina Khan underhandedly colluded with the UK Competition Market Authority’s Sarah Cardell to block on monopoly grounds.
Microsoft is certain to appeal the FTC and CMA decisions, including on constitutional grounds, in US federal court and in the high court of the UK.
“We were in contact over 21 times with the EU Competition on the Microsoft/Activision deal, explaining why the merger would help increase competition and not hinder it,” Kosmin said.
In fact, Japan’s PlayStation spared no expense in lobbying the FTC and CMA to block the merger between Microsoft’s Xbox unit and Call of Duty maker Activision even though the combined Xbox and Activision would be half the size of PlayStation.
Khan, the UK-born chairwoman of the FTC, is allied with anti-business, far-left “progressive” Democrats led by US Senator Elizabeth Warren as opposed to the more bipartisan and mainstream chairwoman of the US Senate Judiciary Subcommittee for Antitrust, Senator Amy Klobuchar.
Another example of a dynamic Ukrainian company is Kiev-based Nova Poshta, a combination of eBay, Amazon and Alibaba that has become a critical lifeline for Ukrainian companies and citizens sending and receiving goods around Ukraine and to Europe, the United States and Asia after the Russian war closed off all air cargo operations and hampered traditional mail.
Nova Poshta beats out all its competitors like Memphis, Tennessee-based FDX Corporation, Seattle-based United Parcel Service, and Deutsche Post–owned DHL in customer satisfaction and has rejected multiple takeover bids from above-mentioned rivals and e-commerce giants.
Colonel Alexander O, a logistics commander for Armed Forces Ukraine (AFU), said the military and the private sector had been forced to work in parallel to overcome unprecedented obstacles thrown up by the war.
For the military logistics, Ukraine is not only teaching the Pentagon how to supply and feed an army using decentralized logistics but showing Amazon owner Jeff Bezos how to use drones to deliver critical supplies to frontline fighters.
What also made the Ukrainian army so effective against their Russian enemy was its ability to adapt innovation and technology at a pace not seen since World War II.
Colonel Alexander O said he was very interested in adapting hyper-ledger distributed technology (blockchain) developed by market leader Digital Asset Holdings and used by companies such as Dutch shipping giant Maersk.
“Right now, we use paper for orders because the Russians cannot hack it, but secure communication via blockchain would be ideal,” he said.
Ukraine’s deputy prime minister in change of innovation and digitalization, Mykhailo Fedorov, recently traveled to Washington to demonstrate how his country has developed the world’s leading e-government system with its Diia platform.
It provides 360-degree citizen services for everything from real-time health records to passports and driver licenses, fine and tax payments, and even allows citizens to report enemy movements.
The Diia platform was developed by Ukrainian-based programmers led by Igor Dubinsky using open-source software and the goal of meeting or exceeding the leading e-government platforms of Estonia and Lithuania.
Peter Premk, a consultant to Slovenian Finance Minister Klemen Bostjancic, said he is proposing that his country ad0pt Diia’s e-health system.
Fedorov, who many tout as a future president of Ukraine after Volodymyr Zelensky, was entirely unaware that his Ted Talk–like presentation of the groundbreaking Diia platform to a standing-room-only crowd of government officials and corporate lobbyists added fuel to the acrimonious battle of influence between US International Development Finance Corporation (DFC) CEO Scott Nathan and US Agency for International Development (USAID) administrator Samantha Power on who will lead non-military support for Ukraine and the $400 billion to $500 billion needed to rebuild the country.
In fact, the battle between aid and investment is currently being waged within the US DFC by the agency’s chief of staff and former State Department official, Jane Rhee, who wants the agency to be more of “social impact” development organization rather than carry out its congressionally mandated mission as the lender of last resort for private companies in geopolitically important countries such as Ukraine.
Shvaichenko has also been able to unite opposing political forces such as Regional Chairwoman Tatyana Yegorova-Lutsenko and Mayor Ihor Terekhov in his native Kharkiv to work together to bring US corporate investment to Ukraine’s industrial heartland.
Yegorova-Lutsenko, who is the top elected official in the Kharkiv region, said she will include the participation of major Ohio-based businesses such as Cincinnati-based Procter & Gamble, Akron-based Goodyear Tires, and Columbus-based American Electrical Power in a soon to be finalized partnership agreement between Kharkiv Region and the State of Ohio negotiated directly with Governor Mike DeWine.
The partnership will also twin Ohio State University with Kharkiv University and follows on an earlier Sister City agreement between the Kharkiv and Cincinnati.
The soft-spoken mayor of Kharkiv, Terekhov, said it is local and regional authorities that must take the lead in promoting and facilitating foreign investors and not the central government in Kiev.
“I will do everything to help companies establish themselves in Kharkiv and all we expect in return are new tax revenues,” he said.
Not only has Shvaichenko nudged Yegorova-Lutsenko and Terekhov on to the same page regarding foreign investment in Kharkiv but also to agree to rename a street to mark the birthplace of Zbigniew Brzezinski, former US president Jimmy Carter’s national security adviser and Cold War architect instrumental in bringing down the Soviet Union.
Shvaichenko said no one should be surprised that Ukrainian companies can operate and even grow market share, because war makes everyone focus “on results and not process.”
Peter K Semler is the chief executive editor and founder of Capitol Intelligence. Previously, he was the Washington, DC, bureau chief for Mergermarket (Dealreporter/Debtwire) of the Financial Times and headed political and economic coverage of the US House of Representatives and Senate.