Armenian startup ecosystem grows against all odds - Formula VC co-founder

YEREVAN, October 13. /ARKA/. Over the past three years there has been an obvious increase in the number and activity of venture funds in Armenia, Karen Vardanyan, сo-founder and  partner of Formula VC venture fund, told ARKA News Agency on the margins of Digitec 23 expo that kicked off today in Yerevan.

"Our startup ecosystem is growing organically against all odds, and due to this growth, we have reached a stage when the need for these amounts has arisen so that startups can grow faster," Vardanyan said.

He noted that in terms of startups, the Armenian market is very small, and if a startup is not focused on foreign markets, then something is wrong.

"In the Armenian market, you can't grow as fast and as much as you can when you are focused on  the international market. We, as a venture fund, in addition to money, also provide our resources, be it knowledge, connections, organization of events and so on to help startups solve the problems," he said.

When asked whether Armenian startups show interest in attracting venture capital or still prefer to promote their projects with their own funds, he noted that in Armenia, as in the rest of the world, the rapid growth of startup companies plays a big role.

"Venture investments, as a rule, are aimed precisely at ensuring this rapid growth. Yes, there are models when companies are moving forward with their business model, investing their revenues to ensure growth, but as a rule, it lasts for a very long time. And because startups are innovative, it's difficult for them to go to market and start generating revenue right away. That's why there are venture capitalists who help - it's the same with Armenian startups," he said.

As for the volume of investments in Armenian startups, he noted that it depends on the sphere in which a startup operates and at what stage the investments are made, but Armenian venture funds usually invest from several hundred thousand to $1 million.

In this regard, he added that some venture funds have started to consider investing in startups at later stages of their activity and on a larger scale.

"We are investing in startups that are just starting their activities.  We have been working since 2021 and have already made 14 investments, we will close 2 more by the end of the month," Vardanyan said.

He noted that investments are made in many areas, from WEB3 to quantum computers, radar technologies and cybersecurity. -0-

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23:06 10/13/2023