Armenian Startup Sector Drew $1M in Venture Funding Over 18 Months, EIF Director Says Ahead of Gyumri Forum

Microsoft Innovation Center Armenia had attracted roughly $1 million in venture investment over the preceding 18 months, according to Bagrat Yengibaryan, director of the Enterprise Incubator Foundation, at a press conference in Yerevan. Yengibaryan attributed the capital to a mix of foreign and Armenian backers, naming Swiss early-stage investor Seedstars alongside local firms Granatus Ventures and the Hovnanian Foundation as sources of funding for Armenian IT companies. The figures were reported by the Arka news agency and republished by Horizon Weekly.

Yengibaryan used the briefing to argue that Armenia's technology sector was entering a new phase, moving away from contract work and low-cost labour toward building proprietary products and solutions. He pointed to U.S. database giant Oracle's acquisition of an Armenian startup as evidence that locally developed technology was competitive internationally, and cited image-editing firm PicsArt, which he said was then ranked among the world's top 20 IT companies, as a parallel example of Armenian products reaching a global audience. Arka, via Horizon Weekly, did not specify the methodology behind the PicsArt ranking, and independent verification of that claim was not provided in the source material.

According to Arka, the broader sector was expanding at 20 to 25 percent a year and accounted for 3.8 percent of Armenian GDP, with the 2013 turnover reported at $380 million. A government IT development strategy, the agency said, aimed to push that figure to $1 billion within four years. These are projections and self-reported industry figures attributed to Yengibaryan and the Armenian government, not independently audited results.

The ArmeniaFTW Forum in Gyumri

The press conference served as a curtain-raiser for the Innovation and Entrepreneurship Forum ArmeniaFTW, scheduled for November 8 and 9, 2014, at the Gyumri Technology Center. Artashes Vardanyan, head of the Microsoft Innovation Center Armenia acceleration programme, said 20 Armenian startups had already registered to present their products to venture funds from the United States, Bulgaria, Ukraine, the United Kingdom, Germany and Armenia, according to Arka. The forum was positioned as a matchmaking event between local founders and visiting investors.

Funding and Organisers

Vahe Danielian, head of the corporate management unit at Philip Morris Armenia, said the company had provided 12.3 million drams (roughly the equivalent of around $30,000 at 2014 exchange rates, though the exact figure was not given in the source material) in grants to the Enterprise Incubator Foundation to support the event, and that the top three teams would each receive 1 million drams to develop their projects. The forum was jointly organised by Innovation and Entrepreneurship ArmeniaFTW, Microsoft Innovation Center Armenia, the Public Journalism Club, EIF, the Gyumri Technology Center, Microsoft, Philip Morris, the Armenian government and USAID, with additional backing from the U.S. Embassy in Armenia and the EU Office in Yerevan, Arka reported. Swiss Embassy, Rostelecom, Sixt Rent a Car, MegasportArmenia and the Markarian Law Firm were listed as general partners.

What Remains Unclear

The source material does not specify which startups received the venture funding, how the $1 million was distributed, or whether the ArmeniaFTW forum produced follow-on investments after the event. The $1 billion four-year target is presented as a government strategy rather than an independent forecast, and the PicsArt ranking among the world's top 20 IT companies is attributed to Yengibaryan without an underlying source. Readers should treat the sector growth and investment figures as claims made by the parties promoting the forum rather than as established economic data. A primary statement from the Enterprise Incubator Foundation, Microsoft Innovation Center Armenia, or the Armenian government was not retrieved for this report.