Valery Krasovsky to Forbes.ua about New Clients, Business Growth during the War, and AI Boom

Sigma Software, a 22-year-old IT company, combines service and product businesses, educational initiatives as well as investment and charitable funds. It is one of a few Ukrainian service IT companies that increased its staff during the big war. Valery Krasovsky explains how the company attracts new customers after the start of the full-scale invasion.

During 2024, Ukrainian IT service company Sigma Software attracted about 50 new customers, CEO and co-founder Valery Krasovsky tells Forbes Ukraine in his first major interview about the company’s business during the full-scale war.

In 20+ years, the small Kharkiv-based firm Eclipse Software Programming has grown to become the international Sigma Software. Today, the company has more than 2,000 employees in 19 countries and in 2023 was ranked among the 100 largest IT service companies by the IAOP, along with Ukrainian Intellias, Infopulse, Eleks, and others.

Prior to the full-scale invasion, Sigma Software’s service business was growing by 25% annually, Krasovsky says. “However, 2024 was much more difficult,” he adds.

The company expects annual revenue growth of 3-5% in 2024.

What does Sigma Software’s business consist of, how does it manage to increase and return customers during a full-scale war, and how many AI projects does the company have?

About Sigma Software’s Key Business Areas

Sigma Software Group covers all the key elements of the Ukrainian IT ecosystem: service business, educational initiatives, investment, and charity funds. The group also includes IdeaSoft, which specializes in blockchain, and Eventyr, which develops games.

Our core business is IT service. We work in the advertising technology, healthcare, fintech, automotive, and aviation industries. Our clients include Volvo and the American telecommunications corporation Comcast, and we also work with serial entrepreneurs who have experience selling their previous startups.

Sigma Software Labs is our venture capital wing with investments of about $3 million, which also supports client companies. SID Venture Partners, a venture fund launched before the war, has already invested in 20 product companies, mostly with Ukrainian founders.

Sigma Software University offers training for experienced engineers and beginners. The charity fund, which is 95% funded by the company, has completed projects for UAH 200 million during the war and provided 40 mobilized company specialists with everything they need.

Each part of the business has its own payback cycle. The effectiveness of investments can be assessed only after five years. We see the progress of startups that attract more investment and get higher scores. This increases the efficiency of our investments, but final conclusions can only be drawn over time.

About the Dynamics of Sigma Software’s Service Business

Before the full-scale invasion, Sigma Software’s service business was growing by 25% annually. In 2022, we grew by more than 30% thanks to previous projects. 2024 was much more challenging, but we still expect revenue growth of 3-5%.

An important indicator for a service company is the number of new projects that contribute to the growth of the business and the team. The bulk of this growth, about 70-80%, comes from current customers.

Due to the recession and the decline in business with regular customers, the share of new business exceeds 50% and sometimes even reaches 60%. Attracting new customers requires much more effort than working with existing ones. In 2025, we aim to return to business growth of 25-30%.

On the Impact of the Big War on Sigma Software’s Relationships with Customers

This year we have attracted about 50 new clients, which is seven to eight more than last year. Previously, we used to hire teams of 10 to 50 specialists for projects, but now they are often small groups of one or two people. It is more difficult for large corporations to hire in Ukraine, while product companies and startups have easier access to this process.

It’s easier for us because we have offices in 19 countries, including Hungary, Romania, and Brazil. We can offer clients to start projects in these offices, reducing risks. However, the main focus remains on the development of the company in Ukraine.

On the Loss of Contracts

During the recession, many clients reduced their teams on our projects, but we did not suffer significant losses. Mostly, we were left by startups that failed to raise a new round of funding. There were up to five such companies.

At the beginning of the full-scale invasion, we lost one American client from the AdTech sector. I can’t disclose the name of the company because of an NDA. Their CEO said: “It’s too dangerous. We’re canceling the contract.” We decided not to cooperate with them anymore.

However, later, representatives of the company’s supervisory board contacted us and said they did not support the CEO’s decision, so he was fired. The company hired a new CEO and insisted on resuming cooperation. It was the only client to do so.

About Booking and Relocation of Specialists

Approximately 300 employees, mostly women or those who had legal grounds to leave, moved abroad. Relocations within the country are almost complete. People are returning, for example, from Lviv to Kyiv. The situation remained stable throughout the year, and we can say that everything has already stabilized.

Currently, the company has about 50 specialists booked. After the launch of booking through Diia, the process became much faster. However, we would like to book many more key specialists than we do now.

Society has a hard time accepting such discussions. According to a report by IT Ukraine, the IT industry donated about $1 billion during the war. We are happy to continue to do so, but we need a little help to develop our business in difficult conditions.

• #Dev Centers & Teams