American dream or Made in Armenia
Armenia IT ecosystem is building role models! With already several acquisitions in its story board, the latest buzzes go around Joomag, Sololearn, Picsart, Teamable, Renderforest, ggTaxi, Shadowmatic, Menu.am, Codefights, WiCastr, Ginosi, Yecup, Flat-Club, and many others, which have developed disrupting solutions for a global audience and are successfully growing in international markets and also putting Armenia on map as an awesome startup hub. The success of these companies motivates and inspires innovative youth in Armenia to think about establishing their own startups and hundreds of startups are created annually but only very few of them succeed in this rally. The reasons vary and we will talk about them later but the analysis of the recent developments in this field shows the following picture.
- The significant majority of teams develop B2C, which is justified by the success of startups in this field. For example,Renderforest, which allows people to create promotional and other type of videos easily. GG, an App for ordering a taxi which has thousands of orders. And the the number of applicants, building some enterprise SaaS solutions within MIC Startup acceleration program is usually less than 10%.
- The startups target the US market from day 1 with Armenia being the test market. Once the company grows and gains momentum, it usually relocates to Silicon Valley, mainly to get access to top VCs, but here there are lots of challenges ,especially regarding poor understanding of the market and culture, and here is where MIC startup acceleration programs comes to help the early stage startups to connect with entrepreneurs and mentors with the startups to support them in finding the best model for US market and also creating networking opportunities for them.
- Most of the early-stage startups are good at technical aspects and lack skills in relationship building with potential partners, customers, they also lack skills in marketing and working with potential angel investors. Here MIC startup acceleration program is trying to cover that gap with its experience and connections, but we don’t want to be a “startup nanny”, our startup acceleration program is designed to support you in these areas, rather than acting as nanny J.
More than 35 startups have participated in the rounds of Startup Acceleration Program and have benefitted from on-going coaching and mentorship from experienced mentors, investors and professionals of the field and valuable opportunities for networking. Many startups have achieved very serious accomplishments and attracted around $2million and are currently in process of taking their projects to the next bigger stage. The last two rounds of the projects show that teams are in three stages of their development.
- Attracting funding
Treescale will be the only Armenian pitching startup in SVOD (Silicon Valley Open Doors) technology investment conference, which will gather top angel investors and VC representatives. The startup has already received USD 40,000 from EIF and the World Bank, and USD 12,000 from CDRF Global for the first development stage.
Penny, a mobile app that helps people to save money based on their spending behavior, is in SV and is in a round of attracting funding and testing Alfa version of the app. The startup has already received USD 20,000 from EIF matching grants program and attracted interest from couple of Fintech investors in the US. They are in process of final paperwork of registering the legal entity in the US in order to start processing the saving transactions
- Idea validation, product testing
Cartly, a mobile application designed to help people to forget about the hassle of grocery shopping, has validated the need in the market and currently conducts the first orderings. Still few orders are being made on daily basis, but the team is in a learning process and has attracted USD 15,000 to improve the app and build a small logistics model.
Volt, a marketplace for getting a helper on demand (electrician, plumber etc.) has passed the idea validation stage and has already reached the point of several daily transactions with happy customers. They have received USD 15,000 from CRDF program and EIF.
- Product development
Some teams are still working on the actual development of the product because the Acceleration Program showed them that they need to develop a product for more specific market niche or that certain features will need to be incorporated into the initial idea in order to provide the highest value for the typical customer segment.
A very promising future for Armenia is in the horizon. But it needs to step up its game in order to join the big leagues, and the Startup Acceleration program of MIC Armenia could be one of the driving forces with other players like Hivefund, HyeTech, IBM ISTC, Granatus ventures, contributing to the development of the local startup ecosystem, which will lead to the ARMENIAN DREAM of building the ‘Silicon mountains.’