Why Tech Matters
The idea behind this column is simple: while we often reference the incredible global asset that the Diaspora is for Armenia, we have yet to find a formula for the systemic engagement of this asset for Armenia’s development. Yes, there are ample individual examples of diaspora-Armenia cooperation leading to significant progress forward for the country, but no structured, concentrated and coordinated effort to put into play the full force of the diasporan network across sectors of Armenia’s economy. Over the next few months, we will explore not only successful examples of this cooperation, but highlight areas where a similar approach will lead to outsize benefits.
Raffi Kassarjian is CEO and Principal Advisor at Sensyan, a boutique advisory firm focused on the growing Armenian tech sector. Since moving to Armenia in 2008, Raffi has led the following organizations as CEO: iCON Communications (pioneer wireless internet service provider), TeamViewer Armenia (also serving as Senior Vice President at TeamViewer GmbH), and the Union of Advanced Technology Enterprises (UATE). He was also a member of the Management Board of Converse Bank Corporation. Previously, Raffi was Vice President and General Manager at Fair Isaac Corporation (NYSE: FICO). Prior to Fair Isaac, he was a Senior Manager with Accenture’s Strategic Services practice.
Raffi is an adjunct lecturer at the American University of Armenia, and founding board member of Repat Armenia Foundation, Impact Hub Yerevan, and EVN Report.
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December has been a good month for Armenian tech. A flurry of recent announcements in the tech industry caps a year of significant achievements. Moreover, the diversity of achievements speaks to the broad foundation upon which Armenian tech is set to grow, and further cements the critical role of diaspora-Armenia collaboration across areas of interest, including high tech.
Two major financing events dominated the Armenian tech narrative on LinkedIn, X, and Facebook over the past few weeks. The first was Service Titan’s (NASDAQ: TTAN) highly successful IPO, which valued the company at nearly $10 billion, and SuperAnnote’s $36 million Series B funding round, which included marquee investors such as Nvidia and Databricks.
TEAM Telecom also made headlines with two significant milestones. It announced the acquisition of the Irish mobile network Imagine Communications—marking the first international expansion by an Armenia-based tech and communications infrastructure company. On the same day, TEAM celebrated the successful issuance of $75 million in sustainability-linked corporate bonds on the Armenia Stock Exchange, with the entire $45 million USD-denominated portion selling out within 48 hours, and the remainder of the issue selling within the next week. Notably, the International Finance Corporation (IFC) purchased $15 million of these bonds.
Finally, the Ministry of High Technology Industry (HTI) made two major announcements regarding infrastructure and tech-sector incentives and investments. Mkhitar Hayrapetyan, HTI Minister, announced that the Armenian government had successfully granted spectrum and operating licenses for Starlink (operated by Elon Musk’s SpaceX), enabling SpaceX to move forward with service testing for a 2025 launch in the country. Hayrapetyan also announced the adoption of the law “On State Support for the High-Tech Sector.” This group of incentives and investments in the high tech industry is notable both for its form (as a law which will be in effect for seven years), and breadth of types of investments covered (incentives on hiring new employees, training and education, R&D tax credits, and reduction of turnover tax). The law also offers benefits for foreign nationals working in Armenia, signaling a commitment to fostering a globally competitive tech environment.
A third, less-publicized but nevertheless critical enabling move was the government’s approval of the utilization of Simple Agreement for Future Equity (SAFE) notes for use in Armenia. Originally pioneered by Y Combinator, SAFE notes simplify early-stage financing and could significantly enhance Armenian startups’ access to capital.
What’s Notable About These Achievements?
The ServiceTitan IPO is important in several ways: first and foremost, it’s a testament to the laser-focused determination, conviction and pure hard work that the company’s two first-generation Armenian-American founders Ara Mahdessian and Vahe Kuzoyan poured into this venture, which started when both founders, fresh out of university, decided to help their fathers manage contracting businesses. Next, it speaks to the strength of the Armenian tech “mafia” in the United States, as Index Ventures, under General Partner Nina Achadjian’s leadership, was one of the key investors in the company. Finally, it is one of the first IPOs that Armenia-based employees participated in and benefited from. Typically, these types of “exit” events spawn a new generation of entrepreneurs hungry to make their own mark on the world.
SuperAnnotate’s announcement of its successful Series B highlights the winning recipe of combining Armenia’s competitive tech talent with educational and venture-forming opportunities abroad. Co-founding Armenia-born brothers Tigran and Vahan Petrosyan completed PhDs at Princeton (U.S.) and KTH Royal Institute of Technology (Sweden) respectively, and launched their start-up at UC Berkeley’s Skydeck accelerator before building up a significant team in Armenia, turning them into the leading solution to prepare and manage data for AI vertical applications.
TEAM’s dual-pronged growth strategy speaks to the growing maturity of the business acumen and experience of Armenian tech entrepreneurs (in this case brothers Hayk and Alexandr Yesayan), a critical area of growth in a domestic industry heretofore dominated by tech talent. TEAM’s growth plans include a nation-wide EV charging network, significant expansion of investment in 5G and Fiber-To-The-Home (FTTH), as well as a complement of services beyond traditional telecom offerings that rely on state of the art, advanced technology solutions.
The government’s focus on new-age infrastructure and investment in the tech sector is welcome, but also long overdue—both the adoption of the new law and approval of Starlink’s entry into the Armenian market took far longer than necessary, and any further delay could have significantly impacted the tech sector’s competitiveness on the global market. The successful conclusion of the Starlink deal required immense efforts from both the Ministry of High Tech Industry and key diasporan Armenians, and both sides should adopt lessons learned for future projects. In particular, as the Armenian government considers several new private sector-led critical advanced tech infrastructure projects, it should focus on eliminating regulatory hurdles, minimizing bureaucratic slowdowns, and allowing competitive private sector leadership and management of such projects.
Priorities for 2025 and Beyond
As we look head to 2025 and beyond, we should focus on the following priority areas:
- Effective and Timely Implementation of Policies: The government should quickly and effectively enact processes and guidelines to implement all aspects of the new IT law.
- Private Sector Reinvestment: Local firms should leverage tax benefits to expand, innovate, and strengthen their competitive edge globally, prioritizing growth over short-term profitability.
- Diaspora-Armenia Collaboration: Local and diasporan tech leaders should work with and encourage the government to remove bureaucratic barriers and attract high-impact projects, and double-down on the unique competitive advantage Armenia has in the form of a well-placed, well-regarded diasporan tech community.
- Visionary Leadership: The private sector should think and act ambitiously, leveraging its global networks to attract foreign investment to strengthen Armenia’s position as the regional tech leader with global aspirations.
By building on the momentum of 2024, Armenia can establish itself as a significant player in the global tech landscape in the months and years to come.
