Armenia’s Tech Sector in 2025: Snapshot of the Ecosystem

Listen to the article. 

The Armenian tech industry is growing increasingly visible on the global stage. In 2024, its turnover reached $2.3 billion and contributed about 7% of the country’s GDP, proving its role as an important pillar of Armenia’s economy. The Tech Market Insights 2025 report, produced by Armenian Code Academy, Technological Education Foundation, and Step consulting, offers a comprehensive view of the sector, allowing for analysis and future projections.

The Sector in Numbers

Armenian tech has been visibly scaling up over the past decade. According to the report, there are 1,253 active IT companies in Armenia, with 538 developing their own products—a 59% increase from the previous year. This shift constitutes a strategic transformation from service provision to an industry concentrated on product development. Tech companies among the top 1,000 taxpayers contributed $79 million to Armenia’s state budget, a considerable sum for this emerging sector. Beneath these numbers lies a complex ecosystem filled with both success stories and challenges.

The industry employs more than 58,700 people—approximately 7% of Armenia’s total labor force. In 2024, the number of tech professionals grew by only 2%, below the double digit growth recorded in previous years. This slowdown mostly stems from a 12% drop in expat professionals who had arrived during the Russia-Ukraine war. Currently, 81.4% of IT employees are of Armenian origin, highlighting the country’s local talent base. However, this workforce is mainly concentrated in Yerevan (94%), with the regions hosting just 6% of tech workers.

Women comprise 40% of the workforce in Armenia’s technology sector, surpassing the average in many developed countries, including 35% in the U.S. However, this representation is uneven: women are predominantly found in non-technical roles such as HR, talent acquisition, and legal, while men continue to dominate technical fields like software development, engineering, and DevOps. The disparity underscores both progress and persistent structural barriers limiting women’s entry into core technical professions.

Key Milestones and Success Stories

2024 was a landmark year in the Armenian Tech sector, with Service Titan’s IPO on NASDAQ standing out as the biggest achievement. With its $10 billion valuation, this CRM tool for tradespeople became the first Armenian-founded company to go public, positioning Armenia as a potential startup incubator. However, this raises a key question: Will Service Titan’s success inspire a new wave of startups or will it widen the gap between big and small players? Currently, Armenia has 653 small firms employing 1-10 professionals and only nine companies employing 500+ people. There’s a risk that investors might focus on bigger companies, leaving small startups underfunded.

This is where the second milestone comes into play. In 2024, Silicon Valley accelerator Plug and Play partnered with Armenia’s Ministry of High-Tech Industry to launch a program in the country, offering mentorship, network and scale-up opportunities to local players. Among the 20 startups selected by Plug and Play, many focus on healthtech, edtech, and development tools—showing that Armenian startups align with global demand. Although it is still too early to assess the program’s effectiveness, as success depends on the startups’ ability to secure funding, these initiatives offer a unique opportunity to learn from top consultants and connect with global investors.

The Government’s Role

Armenia’s emergence as a regional tech hub hinges largely on government policy. The government has declared high-tech as a national priority, and the Ministry of High-Tech Industry  is actively working to attract global talent and foster local growth. After analyzing market conditions and consulting with tech companies and associations, the ministry has developed policies to address existing gaps. 

To attract global talent, the government offers tax refunds for highly qualified professionals. To encourage transformation from service provision to a product-driven ecosystem, companies conducting R&D activities receive tax deductions. Small companies meeting specific criteria can qualify for a 1% turnover tax, helping address knowledge gaps. Tax returns are also available for companies hiring first-time tech employees and investing in employee training. 

Though this new policy package has faced some criticism for prioritizing foreign companies and specialists, proper implementation could help small players grow and large ones to innovate.

Looking Ahead

The Armenian tech sector stands at a crossroads of opportunities and challenges. The diverse ecosystem, substantial monetary turnover, and success stories show a strong foundation. However, slow workforce growth, centralization in the capital, and declining numbers of relocated professionals reveal some shortcomings. As the field evolves, its ability to balance local strengths with global aspirations will determine whether it remains just a regional standout or emerges as a tech powerhouse. One thing is clear: the Armenian tech industry is clearly moving forward—not without flaws, but with significant potential. If we manage to seize the opportunity, the vision of Silicon Mountains might become a reality after all.

The full “Tech Market Insights 2025” report can be found here.

[Tech Matters]