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May 31, 2022

Armenia: The Upcoming Silicon Valley of the Caucasus

Instead of jumping blindly into the New Silk Road or industrialization, Armenia is betting on another table: advanced technologies. From big names like Semrush establishing branches to up-and-coming businesses like an online casino, things are looking up in this landlocked country.

Armenia is a small nation in the Caucasus with few natural resources. There are no ports here; it's not on the way somewhere. You can't even visit or depart Armenia from the east or west. Due to hostilities, Azerbaijan and Turkey have bitter ties, resulting in long-closed frontiers. All the nation does have is human capital, which is increasing as high-tech R&D has become a key focus. Essentially, this goal is to link and conduct business with the outside world and breach the blockade forming around it.

Armenia has been working to expand its high-tech industry for many years. But, it wasn't until the Velvet Revolution (News - Alert) of 2018 that genuine motivation began to build. Suddenly, the tiny nation lying deep in the center of the globe map was full of optimism and looked forward to a bright future.

A new perspective was developed, and one of its driving reasons was the power of technology. IT, software development, and other companies would become the foundation of the re-emerging nation.

The Tech Industry in Armenia

Technology is currently the most important foreign investment in Armenia. Several of the world's most significant technology companies, including Intel, Google, Microsoft, IBM (News - Alert), Synopsys, and Cisco, have a physical presence there. Armenia's entrepreneurial ecosystem has been impacted by Armenian diaspora companies. Service Titan, for example, is currently valued at almost $1 billion.  Local Armenian startup Shadowmatic received the Apple (News - Alert) Design Award in 2015.

PicsArt was an incredible success in Armenia's startup industry. As we all know, it is now one of the world's best picture editing applications. Co-founder and CPO Mikayel Vardanyan stated he and Hovhannes Avoyan conceived the idea when Avoyan's daughter was unhappy with an editing tool she uses. That was back in 2010 when the Google (News - Alert) Play Store was quite empty.

Other notable examples include Zoomerang, a video editing app that rivals Tik Tok with 100,000 downloads every day and 10 million users. Armenians use GgTaxi instead of Uber in Armenia. The app is also accessible in Georgia and Russia.

Although the Armenian government does not give much direct help to entrepreneurs, it does grant tax exemptions tailored only for IT enterprises and startups. They pay no income taxes and a 10% payroll tax, along with various privileges and incentives.

2022 has also been a great year for Armenia's IT industry. NVIDIA (News - Alert) has announced its arrival in Armenia. With $27 billion in sales and over 20,000 people globally, NVIDIA is establishing a second office in Yerevan with 100 engineers. GridDynamics Holding, which has 22 operations globally, is launching a 100-person office in Yerevan.

ManyChat, located in San Francisco, is establishing a research and development office in Armenia. CoinStats validated $3.200.000 in investments. EasyData, a Dutch IT business, has opened an office in Armenia. In addition, Semrush is opening an office.

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