The Full Guide To Start A Business In Armenia’s Capital Yerevan

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Contributor: Anna Vasilyan Armenia's capital Yerevan offers quite some opportunites for entrepreneurs. Find out more about the various benefits of this Eastern European city:

Check out the infographic on how to start a startup in Yerevan!

Founded in 782 BC as the capital of the bronze-age Urartian kingdom, Yerevan is older than Rome. Situated at the very edge of Europe, the city’s local flavour has been shaped by its traditional role as a cultural crossroads. The list of competing regional empires which have continuously fought over this historic city include the Romans, Arabs, Byzantines, Persians, Mongols, Ottomans, Russians and most recently, the Soviets.

Yerevan’s historic cultural mishmash has been partially reshaped by its stint as the capital of the Armenian Soviet Socialist Republic during the better part of the 20th century. During its time as a Soviet capital, Yerevan went from being a backwater town to a regional high-tech hub, clustering many research institutes, and production facilities. These were established for the purpose of designing personal computers, silicon conductors, and guidance chips for soviet ICBMs. This veritable soviet version of Silicon Valley produced some of the best software engineers, and computer programmers this side of the Berlin Wall.

While the collapse of the Soviet Union spelt economic uncertainty for Armenia, it also played a hand in reshaping the capital city as a modern startup hub. Ties between the ex-soviet “Silicon Valley”, and its Californian namesake were firmly established as ethnic-Armenian executives in Palo Alto helped establish R&D centres for firms such as Oracle, Microsoft, Synopsis, National Instruments, Synergy Systems, Mentor Graphics, Cisco, and more in Yerevan, making good use of the country’s software talent.

Currently, this tiny European capital of about a million inhabitants, nestled in the Caucasus Mountains, is witnessing the progression of a very unique and vibrant startup scene, invigorated by extremely low living costs, ease of starting a business, access to resources, and proactive government policies designed to embrace this new movement. Parliament recently passed a tax exemption bill for Armenian newly established technology startups. Digitised accounting methods, online tax returns, and business registration have all contributed to the veritable boom in the sector, with dozens of startups being registered each year. The ecosystem is also being supported by a VC firm, a seed fund and incubators/accelerators and other infrastructure.

The cityscape, which has been marked by successive changes in urban planning philosophies is characterised by 19th-century neoclassical structures interspersed between large, modern tree-lined boulevards, while the distant suburbs (known to the soviets as ‘micro-districts’) feature the (in)famously bland Brezhnev-era residential blocks typical of the Comintern.

Yerevan’s city plan was completely redesigned in the 1920s, in line with the then-popular garden-city urban-planning movement, making this compact city extremely walkable, and easy to get around. Post-independence construction projects have also taken their toll on the urban environment, which, combined with the city’s nascent underground music and art scene draws parallels with the avant-garde vibe which Berlin was notorious for around the turn of the 21st century.

Those who get tired of the work-home-work routine may fare well to know that recent years have seen the emergence of a spirited foodie scene, centred around the downtown Saryan street. Favoured by bohemian artists, techies and restaurateurs for its low rents, classical architecture, and minimal car traffic, the neighbourhood around Saryan is being transformed into an exciting district dotted with fusion restaurants, street side cafes, and clubs offering a unique nightlife. Bars, clubs, and lounges typically serve the ‘Dudu Shot’; a cocktail consisting of tequila, an olive, tabasco sauce, and a secret ingredient indigenous to Yerevan. The city is experiencing a boom in experimental music acts (like whatever the hell this is), drawing crowds from word of mouth in underground bars, in tandem with an avant-garde art movement. All these factors have helped turn Yerevan into an uber-cool hangout spot for local techies and digital nomads alike, who can be seen riding bikes around town, or sitting in local coffee shops, hacking away on their laptops.

Yerevan also boasts two independently-run farmers markets selling fresh, organic vegetables at affordable prices, as well as a renowned flea market known to locals as the Vernissage.

Yerevan’s ultramodern airport typically takes no longer than 15 minutes to navigate from the gate to the street. Armenia’s recent signature of the Open Skies Agreement have shaved off 25% on average ticket prices overnight, and resulted in a 30% increase in connections to destinations across the rest of Europe, the Gulf, and Asia, placing Armenia within a 3 hour radius of some of the world’s financial and business nerve centres.

Discover Yerevan’s Opportunities

Advantages Of Founding A Startup In Yerevan:

  • A legacy as the Soviet Union’s Silicon Valley, a very strong engineering and tech programme, and ties to tech giants around the world all contribute to a very qualified talent pool in Yerevan.
  • With average pricing for a modern one bedroom in downtown Yerevan hovering at around 400 EUR, and low labour costs, Yerevan is one of the cheapest cities in Europe to live and start a business.
  • Recent startup success stories and the growing number of international firms setting up shop in Yerevan has also attracted Venture Capital firms, and world-class accelerators.
  • Yerevan’s newly renovated hyper-modern airport is clean, close, and very convenient for business travel.
  • With online business registration, e-governance, e-taxation and accounting methods, Armenia is ranked among the best places in Europe to start a business.
  • The whole of Yerevan, and indeed most of Armenia is covered by high-speed, fibre wire Internet.
  • Fun, DIY nightlife means a lot of original venues and diverse crowds.

What Founders Have To Consider:

  • Although Paypal does service Armenia, it is still difficult for Armenian-registered companies to receive payments.
  • Transferwise is still working to service Armenia
  • Banking system in Armenia uses the SWIFT code, but banks are extremely reliable and safe.
  • August is a very hot and dry month.
  • Changing laws pertaining to startups, and cumbersome paperwork means you’ll need a good accountant.
  • Primitive public transport in Yerevan and between cities may be confusing to navigate at first, but the metro is very fast, cheap, clean and convenient.
  • Though Yerevan’s relatively new startup scene may feel exciting to some, it may seem too small for others, depending on taste.

With barely a quarter-century of independence under its belt, Yerevan is quickly transforming itself into the new Berlin of Eastern Europe. The scene is characterised by a relatively young crowd of entrepreneurs with unique and daring ideas, startups that beat the odds on an international playing field, and an overwhelming sense of creativity and optimism for the future. The ever-evolving startup ecosystem mirrors the city’s own coming-of-age as a mature metropolis with an eye on the world. The city’s many faults, be they cosmetic or institutional, paradoxically contribute to the excitement that this burg provides.

What Yerevan’s Startup Community Offers

Yerevan

Yerevan caters to a growing, and increasingly well-connected startup community. A series of recent international successes for Armenian startups has inspired a new generation of local entrepreneurs, who are joining the ranks of this community in droves. This growing scene is also being accommodated by an increasingly robust ecosystem. Incubators, co-working spaces, and startup meetup events allow entrepreneurs, tech professionals, marketers and enthusiasts to connect, discuss developments in the field and more. A number of VC firms have also sprouted to prop up this community.

Where To Find Info On Upcoming Events, Meetups & Other Occasions:

  • Techtension.am is an English-language tech blog and media platform which regularly covers Armenia’s startup scene, offers in-depth commentary and coverage, as well as announcements of major meetups and events.
  • ITEL.am, part of the MediaMax group tracks developments in Armenian tech in English and Armenian.

Regular Events & Meetups:

  • HyeTech (a double entendre on the Armenian endonym “hye” and high-tech) organises regular events and meet-ups for Armenian tech professionals in Armenia and around the world.
  • Armenian Developers Meetup is a group of Armenian programmers who regularly organise community and professional events.
  • TEDxYerevan is bringing about 300 people together every year, for a day to share a TED-like experience. The events, licensed by TED, are self-organized by volunteers, with the hope that they become a local forum for ideas within the Armenian community. Aside from the regular yearly TEDx event, side-events are organised throughout the year.
  • ProductTank Yerevan is a regular, independently organised meet up for Armenian product managers.
  • Create Together is a sort of Hackathon/Tech Meetup gathering Armenian techies from Armenia and the Diaspora.

Yearly Or Major Events, Festivals, Conferences:

  • BarCamp EVN is a yearly tech conference (or “unconference” as they call it) which takes place in Yerevan, but occasionally in other Armenian cities as well. Modelled after the Silicon Valley style informal tech community meetups, all presentations are given by participants themselves, with no formally invited guest speakers and without the formality of a traditional conference.
  • SeedStars Yerevan is a yearly startup competition which sends winners to a World Competition.
  • STEP: Idea-to-Market is a yearly competition for early-stage startups to build commercially-viable startups. Winning teams receive seed funding.
  • Yerevan Startup Cup is another yearly startup competition with mentorships and prizes for the winners.
  • Open Game is a development project aimed at game development in Armenia.
  • HyeTech is a gathering of Armenian professionals who share the technical, business and entrepreneurship savvy that makes Silicon Valley a unique place to work and live.
  • DIGITEC Expo: Is a yearly exposition of robotics and tech companies based in Armenia.

Volunteering Possibilities:

  • Impact Hub Yerevan offers internship opportunities to people interested in integrating, and contributing to the country’s tech startup scene.

Choose From The Co-working Spaces In Yerevan

Yerevan

Though the co-working concept only just made it to Yerevan recently, entrepreneurs can now choose from a plethora of co-working spaces, and other venues in which to plop down and get some important work done. Prices are usually very cheap, too!

Co-working Spaces In Yerevan:

  • UtopianLab is a cool and affordable space in the centre. Despite the very minimalist decor, its regulars consider it to be a second home. They offer day rates.
  • LOFT, which, despite its name, is located in a basement in the city centre, has a number of well-stocked facilities to offer with a friendly environment to work productively.
  • Aeon co-work is a community made up of forward-thinking, innovative freelancers, co-workers and startup professionals, giving the opportunity not just to independently work but network as well. This anti-cafe doesn’t offer memberships, space is free to use. Just pay for the hours you spend there.
  • PMC is a shared workspace which offers co-working office, private offices, and meeting rooms. Members can also book the facilities for events.
  • Impact Hub Yerevan is a shared community which incorporates an inspiring workspace, an Idea lab, a business incubator, a social enterprise community centre, an opportunity for education as well as a global network of like-minded people, rather than a simple co-working space. Membership is valid across all 81 hubs operating across the world.

Where To Get Financing In Yerevan

Yerevan

Launching a startup in Yerevan is actually pretty cheap. That being said, it’s always good to have cash on hand. Though one of the biggest complaints about Yerevan’s startup scene is the comparatively modest VC activity, and Armenia’s own “Sandy Hill Road” is still nascent, good ideas, with proven potential for scalability, and a strong team can always find funds.

A number of incubators, accelerators, venture funds and other institutions have been springing up across the city to support Armenian startups.

Incubators:

  • Entrepreneurship and Product innovation Centre (EPIC), part of the American University of Armenia is a platform for promoting entrepreneurial education, cross-disciplinary collaboration, and startup incubation at AUA.
  • Enterprise Incubator Foundation (EIF) is one of the largest technology business incubators and consulting companies in the region that support the development of information and communication technology sector in Armenia through creating a productive environment for innovation, technological advancement and company growth.
  • Kolba Lab is a social venture incubator funded by UNDP, a space for identifying social challenges, testing ideas and nurturing ventures, and a community of troublemakers, thinkers and fixers.
  • Mergelyan Club organises meetings with young researchers, scientists and techies in the form of project presentations, discussions, round tables. Mergelyan Club also supports pre-startups, startups, and individuals with bright ideas.
  • New Technology Education Fund is a charitable foundation that boosts development, the interconnection of science, new technologies and education, as well as to work for the intersection of the mentioned focused areas.

Accelerators:

Grants & Subventions:

  • Awesome Foundation Yerevan is part of a global community advancing the interest of awesome in the universe, $1000 at a time.
  • STEP “From Idea to Market” Grant is a yearly competition held by the EIF in cooperation with the Ministry of Economy and the World bank where the best startups compete for seed funding in the form of a grant.
  • 1Armenia is a foundation which invests in culture and tech projects. They also have a yearly tech competition; offering funding and mentorship to a winning tech concept.

Crowd Investing Platforms:

  • Ayo is an Armenian crowdfunding platform for tech and non-tech projects, both private and not-for-profit across the country.
  • 1Armenia routinely conducts crowdfunded fundraising for tech projects.
  • BoostBloom is an Armenian crowdfunding platform for tech and culture projects.
  • Katil.am is a crowdfunding platform aimed to fund business projects that create jobs in Armenia.

Angel Investors:

  • Angello Capital is a group of highly motivated investment and business professionals who also have valuable experience with civil society projects and who also care deeply about social transformation.

Venture Capital Investors:

  • The Roda Group is a seed stage venture capital firm, based in Berkeley, California focusing on Armenian startups amongst others.
  • The HIVE Seed Fund invests in and partners with early stage startups worldwide, from Silicon Valley to Armenia.
  • StartItUp assists bright individuals to stand out from the crowd with their creative ideas. They help with funding, networking, and marketing.
  • Granatus Ventures is Armenia’s first-ever Venture Capital fund. They have invested in successful Armenian startups such as GG taxi, Menu.am, SkyCryptor, Wicastr, NewsDeeply and more.

Funding sources continue to grow in tandem with the evolving Armenian startup scene, as new accelerators, venture capital investors and angels are popping up in the hopes of assisting the creation of new Armenian success stories. As the saying goes: a viable startup can always find funding.

Fourth Stop: Seek Further Advice & Opportunities In Yerevan

Yerevan

Though Armenia is quickly building a reputation for itself as an easy place to start a business, thanks in part to the lobbying work done by the Union of Information Technology Enterprises (UITE) independent resources are also available to make the process as easy as possible. Entrepreneurs can always use the considerable resources of the Small and Medium Entrepreneurship Development National centre at their disposal.

Armenia facilitates the process of doing business through improved e-government programmes. Entrepreneurs can now register a business online in less than 24 hours. All tax and accounting issues can also be handled online. Additional legal help with starting or running a business in Armenia can be provided by the partners at the LegalLab Law Boutique, or the Margarian Law firm.

Locals are very proud of the Made in Armenia brand. As such, startups and tech companies with over 50% of their code written in Armenia can be found listed on madeinarmenia.org. The Armenian startup community is globally connected and can count on a number of tech heavyweights the likes of Reddit co-founder Alexis Ohanian to offer mentorship and advice for newly established startups.

Yerevan is witnessing an exciting explosion in entrepreneurial activity, with a vibrant startup scene, a lot to do, and many challenges. A support network is also quickly being established around this community to help entrepreneurs go big. Given the circumstances, what better place than to found your startup in Yerevan?

 

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A big thanks for contributing to this guide to Anna Vasilyan!

Featured Image Credit: Serouj of Ourfa

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