Yerevan, Armenia – The rugged mountains of the southern Caucasus aren’t 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.
Dwelling 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 large ambitions for its tech start-up scene, which is making waves to an extent that belies the nation’s diminutive measurement and troublesome circumstances.
The variety of IT-focused corporations in Armenia greater than doubled final 12 months, whereas the variety of workers within the sector elevated by 30 %, in keeping with the Armenian authorities.
Armenian-founded startups corresponding to Piscart, the creator of a preferred photograph and video modifying app, in the meantime, have discovered success in Silicon Valley, which founders have in flip used to help places of work and jobs again house.
The circulation of funding has gone the opposite method, too, with big-name gamers corresponding to Nvidia and Adobe in recent times saying plans to arrange operations within the nation.
Armenia’s authorities has been wanting 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 previously 5 years.
Visitor audio system on the occasion included Moderna co-founder Noubar Afeyan and Nvidia govt 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, informed 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 taking a look at one another,” mentioned Vardanyan, whose startup in 2021 turned Armenia’s first unicorn with a valuation exceeding $1bn.
“They’re taking a look at a few profitable ones, together with ours, and they’re considering, ‘OK, it’s doable to do it, it’s doable to do it in Armenia, and let’s put money into 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 house, too.
Davit Baghdasaryan, the CEO and co-founder of noise cancellation software program startup Krisp, mentioned that many Armenian entrepreneurs have a setup that splits operations between their house nation and Silicon Valley.
“Armenia has been rising and other people 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 house in 2017 after a decade within the US, informed Al Jazeera.
Baghdasaryan mentioned that the rising variety of success tales has impressed others to take a wager on the nation.
“You need 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 mentioned.
“In order that’s very thrilling for me to look at. 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 might probably to make doing enterprise seamless, together with simplifying the method of registering an organization to the purpose that it might probably now be accomplished in as little as quarter-hour.
Final month, the Ministry of Excessive-Tech Business launched laws, known as the New Legislation on Excessive-Tech Assist, to scale back charges of non-public earnings tax and company tax for tech start-ups throughout their childhood.
The federal government has additionally allotted 1.940 billion Armenian dram ($5m) to fund the development of “Engineering Metropolis”, a public-private mission that’s envisaged to incorporate amenities corresponding to an engineering enterprise accelerator, a sophisticated analysis centre, and supercomputing and cybersecurity amenities.
“Armenia’s long-term imaginative and prescient is to develop into a worldwide know-how hub identified 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 informed Al Jazeera.
“We aspire to construct a vibrant tech ecosystem that naturally attracts high expertise and overseas funding.”
‘Tradition of resilience’
On paper not less than, the federal government’s efforts look like paying dividends.
Armenia’s financial system, which is concerning the measurement of Peru’s on a per capita foundation, has grown quickly because the finish of the COVID-19 pandemic.
Gross home product (GDP) is anticipated to develop roughly 6 % in 2024, after increasing 8.7 % and 12.6 %, respectively, final 12 months and in 2022.
Hayrapetyan mentioned his authorities is particularly targeted on the potential of AI.
“AI isn’t just a buzzword now but in addition a driver of public administration transformation and supply of high quality of public companies; it’s key to extend your productiveness by redesigning our operations,” he mentioned.
“In response to quite a few worldwide impartial studies, our extremely educated and technology-focused inhabitants provides Armenia a singular benefit in turning into a worldwide chief in AI and machine studying. To completely harness this potential, we recognise that investing in human capital is paramount.”
Picsart’s Vardanyan mentioned that a number of the authorities’s efforts have been extra profitable than others.
“In some circumstances, it labored. In different circumstances, it nonetheless wanted to maneuver a bit sooner as a way to be aggressive with different international locations,” he mentioned.
However with Armenia more likely to at all times wrestle to compete with larger international locations that may supply extra beneficiant incentives, consistency and long-term imaginative and prescient can be essential to the native ecosystem’s success, he mentioned.
“In order that’s why it’s actually vital to maintain it going,” he mentioned. “So it’s not that you simply did it as soon as after which it’s good to neglect for 10 years, it gained’t work.”
With regards to Armenia’s promoting factors, although, Vardanyan singled out an element that’s past the scope of the federal government: a “tradition of resilience” solid by hardship, together with shortages of vitality 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-about the top of the world,” he mentioned.
“However for us, taking a look at electrical energy, let’s determine it out. What we are able to do that method? 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.
