Encircled by geopolitical risks, Armenia builds a lively tech startup scene | Technology

Yerevan, Armenia – The rugged mountains of the southern Caucasus will not be 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 probably 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.

Residence 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 massive 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 yr, whereas the variety of workers within the sector elevated by 30 %, in keeping with the Armenian authorities.

Armenian-founded startups comparable to Piscart, the creator of a preferred photograph and video enhancing app, in the meantime, have discovered success in Silicon Valley, which founders have in flip used to help workplaces and jobs again dwelling.

The movement of funding has gone the opposite manner, too, with big-name gamers comparable to Nvidia and Adobe lately saying plans to arrange operations within the nation.

Armenia’s authorities has been desperate to leverage the native scene’s hyperlinks abroad to spice up its profile on the worldwide stage.

‘Put money into 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 prior to now 5 years.

Visitor audio system on the occasion included Moderna co-founder Noubar Afeyan and Nvidia government Rev Lebaredian.

The concept 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 considering, ‘OK, it’s attainable to do it, it’s attainable 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 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 other people from the US, they see that there are literally attention-grabbing 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 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 stated.

“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 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 scale back charges of private earnings tax and company tax for tech start-ups throughout their youth.

The federal government has additionally allotted 1.940 billion Armenian dram ($5m) to fund the development of “Engineering Metropolis”, a public-private venture that’s envisaged to incorporate services comparable to an engineering enterprise accelerator, a complicated analysis centre, and supercomputing and cybersecurity services.

“Armenia’s long-term imaginative and prescient is to turn into a worldwide 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 no less than, the federal government’s efforts seem 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 yr and in 2022.

Hayrapetyan stated his authorities is very targeted on the potential of AI.

“AI isn’t just a buzzword now but additionally 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 stated.

“In line with quite a few worldwide unbiased reviews, our extremely educated and technology-focused inhabitants provides Armenia a novel benefit in changing 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 stated 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 quicker with a purpose to be aggressive with different international locations,” he stated.

However with Armenia prone to at all times battle to compete with greater international locations that may provide extra beneficiant incentives, consistency and long-term imaginative and prescient will likely 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 is advisable overlook for 10 years, it received’t work.”

In the case of Armenia’s promoting factors, although, Vardanyan singled out an element that’s past the scope of the federal government: a “tradition of resilience” solid via hardship, together with shortages of power and fundamental items within the aftermath of the breakup of the Soviet Union.

“There was no electrical energy, there was no water, however you have 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 stated.

“However for us, electrical energy, let’s determine it out. What we are able to do that manner? No web connection? OK, let’s determine it out.”

Journey to Armenia and lodging have been paid for by the Union of Superior Know-how Enterprises.