Yerevan, Armenia – The rugged mountains of the southern Caucasus are usually not an apparent location for a thriving tech startup scene.
Located 7,000 miles from Silicon Valley, landlocked Armenia is buffeted by geopolitical headwinds from all sides.
To the north and south, respectively, lie Russia and Iran, two of essentially the most closely sanctioned international locations on the planet.
To the east and west, it faces Turkiye and Azerbaijan, adversaries whose relations with Yerevan, respectively, are marked by tensions over the 1915-1916 Armenian genocide and armed battle over the disputed Nagorno-Karabakh area.
House to fewer than 3 million individuals, the ex-Soviet state has an financial system that’s barely bigger than that of poverty-stricken Haiti.
None of that has dampened Armenia’s huge ambitions for its tech start-up scene, which is making waves to an extent that belies the nation’s diminutive dimension and troublesome circumstances.
The variety of IT-focused corporations in Armenia greater than doubled final yr, whereas the variety of workers within the sector elevated by 30 %, based on the Armenian authorities.
Armenian-founded startups similar to Piscart, the creator of a well-liked picture and video enhancing app, in the meantime, have discovered success in Silicon Valley, which founders have in flip used to assist workplaces and jobs again dwelling.
The circulation of funding has gone the opposite approach, too, with big-name gamers similar to Nvidia and Adobe in recent times asserting plans to arrange operations within the nation.
Armenia’s authorities has been desirous to leverage the native scene’s hyperlinks abroad to spice up its profile on the worldwide stage.
‘Spend money on Armenia’
Final month, Yerevan hosted the annual World Congress on Innovation & Know-how (WCIT), a global discussion board for discussing rising applied sciences, for the second time up to now 5 years.
Visitor audio system on the occasion included Moderna co-founder Noubar Afeyan and Nvidia government Rev Lebaredian.
The thought of an Armenian tech firm bringing a product to market was as soon as seen as “tremendous distinctive”, Mikayel Vardanyan, chief product officer at Picsart, advised Al Jazeera on the sidelines of WCIT 2024.
However nowadays, there are “many, many corporations doing it and yearly this quantity is rising as a result of they’re one another,” stated Vardanyan, whose startup in 2021 turned Armenia’s first unicorn with a valuation exceeding $1bn.
“They’re a few profitable ones, together with ours, and they’re pondering, ‘OK, it’s doable to do it, it’s doable to do it in Armenia, and let’s spend money on Armenia.’”
Tech founders in Armenia readily acknowledge that Silicon Valley stays the place to be for fundraising and networking alternatives.
However they are saying that, more and more, alternative beckons at dwelling, too.
Davit Baghdasaryan, the CEO and co-founder of noise cancellation software program startup Krisp, stated that many Armenian entrepreneurs have a setup that splits operations between their dwelling nation and Silicon Valley.
“Armenia has been rising and folks from the US, they see that there are literally fascinating entrepreneurs and founders popping out of Armenia. They get a lot extra motivated, to not solely give again, however come over,” Baghdasaryan, who moved dwelling in 2017 after a decade within the US, advised Al Jazeera.
Baghdasaryan stated that the rising variety of success tales has impressed others to take a guess on the nation.
“You wish to be a part of it as a result of your coronary heart and your mind are nonetheless – a part of it – in Armenia,” he stated.
“In order that’s very thrilling for me to observe. As a result of I stayed there for 10 years, I got here again. I do know each worlds very effectively.”
Armenia’s authorities says it’s dedicated to doing what it will possibly to make doing enterprise seamless, together with simplifying the method of registering an organization to the purpose that it will possibly now be accomplished in as little as quarter-hour.
Final month, the Ministry of Excessive-Tech Business launched laws, known as the New Regulation on Excessive-Tech Assist, to cut back charges of private earnings tax and company tax for tech start-ups throughout their adolescence.
The federal government has additionally allotted 1.940 billion Armenian dram ($5m) to fund the development of “Engineering Metropolis”, a public-private undertaking that’s envisaged to incorporate amenities similar to an engineering enterprise accelerator, a complicated analysis centre, and supercomputing and cybersecurity amenities.
“Armenia’s long-term imaginative and prescient is to turn out to be a world know-how hub recognized for innovation, high quality, and excellence, the place we create and construct new industries and sectors,” Armenia’s Minister of Excessive-Tech Business Mkhitar Hayrapetyan advised Al Jazeera.
“We aspire to construct a vibrant tech ecosystem that naturally attracts prime expertise and overseas funding.”
‘Tradition of resilience’
On paper at the very least, the federal government’s efforts seem like paying dividends.
Armenia’s financial system, which is in regards to the dimension of Peru’s on a per capita foundation, has grown quickly because the finish of the COVID-19 pandemic.
Gross home product (GDP) is predicted to develop roughly 6 % in 2024, after increasing 8.7 % and 12.6 %, respectively, final yr and in 2022.
Hayrapetyan stated his authorities is very centered on the potential of AI.
“AI is not only a buzzword now but additionally a driver of public administration transformation and supply of high quality of public providers; it’s key to extend your productiveness by redesigning our operations,” he stated.
“In accordance with quite a few worldwide unbiased reviews, our extremely educated and technology-focused inhabitants offers Armenia a singular benefit in turning into a world chief in AI and machine studying. To totally harness this potential, we recognise that investing in human capital is paramount.”
Picsart’s Vardanyan stated that among the authorities’s efforts have been extra profitable than others.
“In some instances, it labored. In different instances, it nonetheless wanted to maneuver a bit quicker to be able to be aggressive with different international locations,” he stated.
However with Armenia more likely to all the time battle to compete with greater international locations that may provide extra beneficiant incentives, consistency and long-term imaginative and prescient might be essential to the native ecosystem’s success, he stated.
“In order that’s why it’s actually necessary to maintain it going,” he stated. “So it’s not that you just did it as soon as after which it’s worthwhile to neglect for 10 years, it received’t work.”
In relation to Armenia’s promoting factors, although, Vardanyan singled out an element that’s past the scope of the federal government: a “tradition of resilience” cast by way of hardship, together with shortages of power and primary items within the aftermath of the breakup of the Soviet Union.
“There was no electrical energy, there was no water, however you had been determining what to do even within the state of affairs, whereas in different international locations it’s thought of the tip of the world,” he stated.
“However for us, electrical energy, let’s determine it out. What we are able to do that approach? No web connection? OK, let’s determine it out.”
Journey to Armenia and lodging had been paid for by the Union of Superior Know-how Enterprises.
