George Soros backs IT services in eastern Europe

Business magnate George Soros has invested in Ukraine-based IT services company Ciklum, in a move that gives more credibility to the region as a destination for enterprise IT services.

Soros's Ukrainian Redevelopment Fund has acquired an undisclosed stake in the company which provides businesses, including UK organisations, access to IT skills in Ukraine.

Ciklum helps companies find and recruit software development staff in Ukraine, which has a large software engineering skillset, and then provides the office space for its customers at its operations in Ukraine and Belarus. The company has about 2,500 software engineers working for different corporate global customers.

“Ciklum is a very dynamic company in an industry that represents the future of Ukraine. It is also an investment in what I call the new Ukraine – Ukrainians who are young, well educated, and eager for their country to break from the past and to build an open society. I hope that my investment serves as an example to other investors,” said Soros.

According to Ciklum founder and CEO Torben Majgaard, following the investment the company has plans to expand. “We already have plans to open new offices in Poland and Spain next year. In 2016 we plan to significantly increase our business in the UK and the US, in particular,” he said.

Existing UK customers include online takeaway service Just Eat, which has built a team of software development and project managers in the Ukrainian capital Kiev through Ciklum.

Speaking to Computer Weekly in 2014, Just Eat director of international engineering Jim Beattie said the company needed to build its software team quickly and wanted the right mix of engineering skills, culture, time zone and cost. 

“Cost was a secondary consideration. Ukraine is not as cheap as places such as India but it is important to get a good balance of other factors,” he said.

Beattie added that Ciklum’s model means the workers are genuine staff of the customer and the supplier is not involved in the employee relationship with the customer. A fixed fee is paid to Ciklum for each worker but the customer is in full control of the worker, who is a full staff member.