Ukraine to get new IT outsourcer co-founded by Vasyl Khmelnytsky

Investment companies UFuture and InSoft Partners have established a joint company InSoft Software that will specialize in IT outsourcing. The founder of UFuture is Vasyl Khmelnytsky, the founder of InSoft Partners is Vitaly Gorovoy. The parties do not disclose the size of the charter capital, as well as the shareholding structure of InSoft Software.

AIN.UA’s own editor explains the ins and outs of the new company.

What will InSoft Software do

InSoft Software will develop ‘turnkey’ software and will provide consulting services, that is, help customers launch software products on the market and support them.

Currently, InSoft Software is developing a marketing strategy and preparing an international roadshow.

What UFuture and InSoft Partners do and what connects them

InSoft Partners is an investment management company that invests in IT businesses and provides support services for mergers and acquisitions (M&A advisory).

Vasyl Khmelnytsky. Photo here and after by Olha Zakrevska

UFuture is an investment group of Ukrainian entrepreneur Vasyl Khmelnytsky. It includes infrastructure and innovation businesses:

  • UDP development company,
  • Igor Sikorsky Kyiv International Airport,
  • national outdoor advertising operator “RTM-Ukraine”,
  • industrial park “Bila Tserkva”,
  • renewable energy investment and development company UDP Renewables,
  • Biopharma pharmaceutical company,
  • innovation parks UNIT.City (part of which is UNIT Factory programming school) and LvivTech.City.

InSoft Partners and Khmelnytsky already have a joint IT-related project — the career center X.Teams. It operates under the aegis of UNIT Factory and helps students and graduates of the programming school to launch startups, intern in Ukrainian and foreign companies, get employment search assistance.

Development of InSoft Software

InSoft Software will take the conventional approach and will grow at the expense of acquisitions of small IT companies on the market with their subsequent merging into a single structure. This is how Luxoft, GlobalLogic, Sigma Software and other international outsourcers with large R&D in Ukraine developed. InSoft Partners will be responsible for finding and acquiring suitable assets.

“By combining a deep understanding of the processes of IT companies with M&A skills, we are planning to implement a roll-up strategy that market players have been discussing for 10 years. In addition, we (…) know how to transform the classic software development outsourcing model to get margins that are significantly higher than the market average,” comments Vitaly Gorovoy, managing partner of InSoft Partners.

InSoft Software already holds two controlling stakes in small Ukrainian outsourcing companies: web developer Lenal (according to the IT Association of Ukraine, with 75 employees in Kyiv and Tallinn) and Kharkiv’s Rozdoum (according to DOU, with 20 to 80 specialists).

Why Khmelnytsky needs an IT outsourcer

Vasyl Khmelnytsky is a Ukrainian billionaire whose primary portfolio consists of development projects. In the community he is known for two attempts to enter the creative industry through industrial parks: the first was unsuccessful (Bionic Hill), and the second is experiencing rather rapid growth (UNIT.City) and ‘sprouts out’ on the way. Khmelnytsky participated in both projects as an investor (via the charitable foundation K.Fund) and a developer (via the developer UDP).

Earlier in an interview with AIN.UA Khmelnytsky said that he does not hold any assets in IT companies. Today he announced that he has decided to explore outsourcing after all. According to Khmelnytsky, he was attracted by the impressive growth rate of the IT industry in Ukraine.

“It has been showing annual growth of 20-26% for quite some time now. It generates billions in revenue,” he said, adding that InSoft Software plans to become one of the largest national players.

UFuture’s press release reads that as part of InSoft Software Khmelnytsky’s investment group will look for strategic partners and “will contribute to the organic growth of the joint business” by leveraging its “international network of contacts.”