Belarusian startup that moved to Ukraine becomes self-declared ‘unicorn’ with $1 billion valuation

Belarus-founded tech firm PandaDoc, which moved to Ukraine in 2020 during the protests against dictator Alexander Lukashenko, has become a ‘unicorn,’ bringing its total valuation to $1 billion, according to Mikita Mikado, its co-founder.

The company doesn’t disclose how much money it raised during the most recent investment round. Forbes estimates that PandaDoc’s investors, Canadian OMERS Growth Equity, the U.S. G Squared and smaller investment funds, put up to $100 million into the company.

In August last year, PandaDoc raised around $36 million, bringing its valuation to $255 million, according to the startup analytics website PitchBook. The company has nearly 20 investors, including the European Bank for Reconstruction and Development and Microsoft’s venture fund M12.

Founded in 2013, the company sells software that lets its customers create, share and sign official documents online. PandaDoc employs about 360 people and works with over 30,000 small and medium-sized businesses across 130 countries. Over the last few years, its revenue grew by 63%, but the company wants to double its growth.

PandaDoc is now based in San Francisco. It has offices in Portugal, Poland, the Philippines and Ukraine’s capital Kyiv.

“This additional funding will allow us to continue to innovate, expand our team, and grow our global footprint,” Mikado said in the company’s statement published on Sept. 22.

Lucrative business

The pandemic is the right time for PandaDoc to enter new markets and attract clients from various industries as businesses all over the world now prefer to manage documentation online. Globally, PandaDoc competes with services like DocuSign, Eversign, DocSend and GetAccept. Ukraine has its own version, AirSlate, which, rumor has it, has already become a ‘unicorn’ in the U.S.

The most common business model for this startup is a subscription. PandaDoc, for example, charges its users $19 or $49 a month and offers services like e-signature for free.

Investors said that PandaDoc’s service is in demand: it allows businesses to increase efficiency, reduce costs, and accelerate their growth, according to Mark Shulgan, managing partner and head of OMERS Growth Equity.

“We are thrilled to support Mikita Mikado’s ambitious vision, and look forward to supporting him and his team in this further evolution,” Shulgan said.

Links with Ukraine

For Mikado and the company’s other founder Sergey Barysiuk, 2020 was a challenging year. In August last year, PandaDoc joined the mass protests in Belarus, which started when Lukashenko announced the results of the presidential election that many believed to be rigged.

Mikado and Barysiuk launched an initiative to raise money for law enforcement who wanted to quit their job, to avoid supporting Lukashenko’s regime. In September 2020, the police searched PandaDoc’s office in Minsk, detained some of its employees, and charged four of them with fraud. The company had to pay $1,466 to free them and close the case.

But working in the country flooding in mass protests, tortures, searches and internet outages was not viable for PandaDoc’s business. Mikado decided to relocate its employees to neighboring countries, including Poland and Ukraine. Now nearly 140 techies work from Kyiv, Odesa and Lviv and PandaDoc wants to hire more.

Mikado said that Ukraine is a convenient market for Belarusian techies because of a favorable 5% revenue tax for private entrepreneurs, a visa-free regime between the two countries and a similar language and culture.

“The history of PandaDoc in Ukraine will continue because it is a cool market and a lot of talented people are working here,” Barysiuk said.

The company wants to liquidate its office in Minsk because there are no employees left there. “PandaDoc is probably the world’s first unicorn in exile,” said Kirill Golub, Belarusian venture investor.

Although after the liquidation of its office in Minsk PandaDoc won’t have a direct impact on the country’s economy, the fact it has become the first Belarusian startup that reached a $1 billion valuation is important, experts said.

Apart from PandaDoc, Belarus-founded EPAM and Wargaming became ‘unicorns’ many years ago, but EPAM is a public company, while Wargaming has never officially disclosed its valuation, so PandaDoc is “the first real unicorn from Belarus,” said the company’s investor from Estonia Ragnar Sass.

“There is no question that PandaDoc’s last 12 months have been the biggest rollercoaster that you can imagine. But despite all the odds and real battles, the company has started growing faster than before,” Sass said.