Bukhman turned on the TV. It was infiltrated. He scanned news apps on his smartphone. “We didn’t believe it would happen,” Bukhman, a Russian-born billionaire with thousands of employees who work on mobile games in Russia or Ukraine, says. His Ukrainian staff responded to his shock and jumped into action.
The Slack channel is no longer bustling with jokes, collegial chat and updates about company games. Instead, it’s flooded with news and information about evacuations and donations. “We don’t have the time to do everything. Bukhman, who has 1,500 soldiers in the war zone, says that they started to react much faster than us. “I was aware of the major decisions and had provided resources, but I thought this would all be over within a few days.”
Dmitri and Igor, his younger brother, share the decision-making at the 18-year old company. Games such as Fishdomand Gardenscapes, which are the source for the pair’s combined fortune of more than $16billion, were soon seen pacing the streets between their Kensington residences, negotiating a plan. Bukhman, 40 says, “We aren’t a large company.” We have huge revenues but we are only two people and have managers. But they are still working on games. There is no plan B.
The brothers placed their Ukrainian employees on paid leave hours after the invasion. They set up hotlines for employees to evacuate within the next two days. 48 hours later, they paid a bonus equal to one month’s salary to their entire workforce of 4,000, which included the 1,500 Russian workers. Bukhman said that the payment was a reassurance to staff and helped not only Ukrainians fighting on the frontlines but also Russians affected by the collapse in the ruble.
“We won’t be able continue working as we did before, but I believe we will continue to work in Ukraine.”
The pair quickly found themselves back on the wrong side of the tracks. Despite hundreds of their colleagues running for safety, Playrix employees began fighting on Slack. After some jokes and retorts, a Ukrainian employee replied: “It’s probably fun and easy for you. . . . It was not like you woke up at 5 AM to an amazing ‘boom.
These spats turned into “outbursts uncontrolled hatred among employees” over the next few days, Bukhman claims. The brothers first demanded an end to all “political” discussions. Company moderators began deleting posts about war, before closing down Slack completely. Some employees were furious and at least one quit. We don’t forbid anyone from expressing their opinions publicly. In a note, Bukhman explained that he only asked staff to leave at most a few channels open for business communication. “We are literally in between two fires. Although it’s hard for us to make tough decisions, we must.
Layrix and its billionaire founders find themselves in a difficult spot
But they are not the only ones. In recent years, many entrepreneurs have turned to Ukraine and Russia to find cheap talent in tech. They find their businesses in a conflict zone. Grammarly, which is based in San Francisco, was founded by Alex Shevchenko (from Ukraine) and Max Lytvyn (from Ukraine). In 2020, Grammarly opened a 128-station office in Kyiv. Lyft and Snapchat also had offices in Kyiv, while Amazon-owned Ring employed over 1,000 workers in the capital. IPG Photonics, Ubisoft
World of Tanks
Wargaming, a game developer, has (or had significant Moscow outposts.
Many Ukrainian professionals have fled to the neighboring countries with 3.7 million others. Others, mostly men, have switched their keyboards for Kalashnikovs. Tatiana Perebeinis was the chief accountant at Palo Alto search optimization startup SE Ranking.
Tens of thousands of Russian tech workers, who either oppose the war, or find that Russian internet restrictions and sanctions make it impossible to work, have fled to Armenia, Georgia, and Turkey. Bukhman says he has no plans of leaving Russia, but Playrix has helped about 10% of his 1,500 Russian employees relocate overseas.
Others have chosen a more difficult path. JetBrains, a Prague-based company which owns Android’s key programming language, was shut down its Russia offices in March by Sergey Dmitriev (Russian billionaire) and Valentin Kipyatkov (Prague-based company). The Czech Republic and other countries will not allow staff to move. JetBrains will not say how many of its 1,900 employees will be affected. However, it did announce last April a 1,000-desk campus expansion at St. Petersburg. It also had offices in Moscow as well as Siberia.
Miro, a startup that facilitates workplace collaboration in San Francisco, raised $400 million at a $17.5billion valuation in January. It also closed its Russia office, and fired workers who refused to move. Mikhail Mizhinsky is the managing director of Relocode in London, which assists Russian startups to set up shop in Europe.
Russia has created a tax break to exempt tech companies and workers from income taxes for three years in an effort to stop the brain drain. It also promises that any military draft will not be applied to tech workers. However, as Russia’s sanctions increase and the air routes to Russia are closing, it is unlikely that this will convince anyone to remain.
Some feel the war is very close to their hearts, like Vlad Yatsenko and Nikolay Storonsky, billionaires cofounders of Revolut, the British digital bank. It was founded in 2013 at $33 billion. Revolut is now one of the most valuable startups in the world. Storonsky was born in Ukraine. He grew up in Russia, but left when he was 20 to become a British citizen. Yatsenko hails from Mykolaiv in Ukraine, where he called Vladimir Putin “one the most brazenly lying people in history”.
When I was growing up, war between Russia and Ukraine was not possible. Storonsky wrote a blog post March 1 in which he condemned war and the loss innocent lives, but he did not criticize Russia. His customers raised $11 million for the Ukrainian Red Cross through an appeal he led. Revolut, with around 50 employees in Ukraine at the beginning of the conflict and a few in Russia, contributed another $2 million.
It is about fifteen hundred miles from Kyiv.
Playrix’s discrete offices in Dublin’s business park are almost deserted as the Irish celebrate St. Patrick’s Day. Bukhman takes down the blinds in the boardroom to dim the sun streaming through the Dublin Mountains. He shrugs and says, “Some of us work according to the Russian calendar.”
Playrix, which was founded by the brothers in 2013, has been marketed as an international company. However, it is primarily Russian-speaking. The company’s luxurious offices are nestled among neighbors such as Microsoft Ireland. It is a far cry from Playrix’s childhood in Vologda (a small Russian town 300 miles northeastern of Moscow), where the Bukhman brothers shared a bedroom.
Their father, a vet who also worked as security guard, and their mom, who was a hiring manager at a major employer in the city, a ball bearing plant, were both unable to make ends meet. “We had food all the time, but there was no money at the end of each month.”
Bukhman felt like an outsider growing up in one the few Jewish families of the remote city. This song is a Soviet-era hit and even Russians have heard it. He says that he didn’t feel Russian in a certain way. “It was difficult for me to publicly declare that I was Jewish, even though we have never experienced any form of anti-Semitism. But we were told by our grandparents and parents that you should be cautious.”
After a professor suggested that shareware could be profitable, Bukhman began coding in 2001. Dmitri, his younger brother, was in high school and Igor convinced him to get started with screen savers and games. Their grandfather gave them a Pentium 100-powered computer. He says, “Clearly we didn’t have the money to purchase a computer ourselves.” “When we first started making money, one our first purchases was another computer. This doubled our productivity.”
In 2004, the brothers founded Playrix and began hiring local developers and artists. From making simple puzzle games for their home computers, the company moved on to creating Facebook-powered social games that could compete with Zynga’s Farmville. Finally, they settled on free-to play apps in 2009. They also acquired several independent game studios in Ukraine along the way.
Playrix’s games like the puzzler Homescapes or the city builder Township are top-rated on App Annie’s Top Downloads. Playrix games are completely free. However, players must pay $5 per month for “microtransactions”, which cost a small amount of money to unlock new levels and upgrade. Playrix makes $2.7 billion annually from revenue. However, the majority of its players are in America. The games also perform well in China.
The brothers were able to start their business with Microtransactions, without any outside investment. The brothers had always wanted to leave their hometown. However, the situation became more urgent when Russian police visited their office to ask about their finances a decade prior. It turned out that they had been sold land by someone else. It’s not about the money. “I lost my faith in the system and the feeling of safety,” Bukhman said.
Dmitri and he immigrated to Israel in 2016. In 2020, the brothers moved to London. They asked Forbes, like many other Russian-born billionaires to be listed as Israeli for the Billionaires ranking. We agreed to their requests in cases where they had already relocated.
Playrix saw its revenue rise 53% during the pandemic. This was thanks to smart marketing that rescued players who remained at home. It is now the fourth-largest mobile gaming business in the world (by revenue), behind NetEase, China’s Tencent and Activision. Since 2020, the net worth of the Bukhman brothers who own 96% of it has more than doubled.
Years of rapid growth after the removal of Dublin were not good preparation for the current crisis. The most common strategy for geopolitical contingency planning in young, agile tech companies is to avoid spending too much time on this. Some startups were still planning for the worst. The best-prepared startups were those that have roots in conflict-ridden areas. Wix, a Tel Aviv-based website developer, began moving key Ukrainian employees to Poland in January. It offered to pay 1,000 Ukrainian employees to temporarily move to Turkey, despite rising tensions. A fleet of buses chartered and operated by Wix transported the remainder to relative safety in western Ukraine after Russian troops invaded. Fiverr, an Israeli freelance marketplace, was listed on the New York Stock Exchange. It had also a plan to evacuate Kyiv-based employees out of Ukraine and help those who remained.
Many Israeli startups have strong ties to Ukraine due to decades of Jewish emigration to the former Soviet Union. Their emergency plans are well-rehearsed. Marian Cohen, CEO, Israeli High-Tech Association, is a lobby organization.
Although few businesses were as well-prepared as these,
Some were quick to respond. Revolut’s executives quickly condemned the war and made it public. The company then jumped into action and helped evacuate employees and cut off Russian accounts. It began waiving fees for transfers to Ukrainian bank account accounts by mid-March and reducing identity checks for customers who may have fled without documents or passports. Snap immediately suspended ads in Russia after the invasion. It also helped to evacuate 300 staffers from Kyiv (who had built much of the AI technology used in the apps’ selfie filters). The company also donated $15 million in aid for Ukraine.
Since the beginning of the war, the public position of the Bukhmans has changed significantly. Dmitri declared Playrix “apolitical” when he addressed his employees on February 24th. Four days later, as the brothers announced additional paychecks to their employees, they declared that the war was a “great tragedy” and called for its end.
Some Playrix employees criticized the statement for being too little too late. One Ukrainian employee spoke under anonymity to say that Playrix did not call the events of five days a war for five days. “I am angry that the company doesn’t want to call a spade an spade.”
Although it was meant to be a peacekeeping measure, staff frustrations only grew after the purging Slack channels. Many Ukrainian workers found that Slack was their only way to contact colleagues in Russia or Ireland.
Playrix producer, who has remained in Kharkiv despite Russian bombings, said he was “shaking from anger” when he saw the company remove posts from Ukrainian employees. The producer said he could understand why Playrix wanted to restrict political discussion. However, “it’s one thing when it is a political opinion and quite another when there’s a conflict,” he added. He asked for anonymity out of fear of reprisals. In protest, he quit Playrix.
Others have indicated plans to follow. Playrix’s long-serving employee, who stayed in Ukraine during the war, has announced that she will be leaving as soon as possible. “The company’s position was clear: “We’ll get your out of the country but if anyone wants to remain and fight for their freedom, don’t expect any help.”
The founders acknowledged that employees had suggested to them that they should be more public in their support for Ukraine. Igor wrote to employees March 4: “On social media, [Dmitri] & I expressed our support Ukraine in the best words we could use,” Igor wrote. “But, we have 16 offices in Russia and 1,500 employees there. . . . We can’t take an open position right now, as we have a responsibility for our employees and their families.”
Russian law is now so harsh that it criminalizes even the characterization of an invasion as a war. It also threatens Russian citizens with treason charges if any “material assistance” is provided to Ukraine. These concerns were a major concern at the beginning of the conflict. Playrix is now more confident about its position. Playrix, after initially dissuading employees from donating to Ukrainian causes, and worrying internally about giving additional checks to personnel in the war zone, announced that it would donate $500,000 on March 11, following Revolut. The rules have been relaxed and one mass Slack channel was reopened.
The situation is far from perfect. Bukhman expects that more employees will leave Russia. He still has long-term employees. His managers are trying to find ways to reduce the amount of interaction that Ukrainians have with Russian speakers, even Bukhman. Although it isn’t a recipe for harmony this is a good start. Bukhman states, “But I believe we will continue to work in Ukraine.”