Highlighting the rapid growth of Armenia’s information technology (IT) sector, an Armenian software company has attracted $5 million in funding from private investors in the United States.
Founded by three Armenian IT engineers and an Armenian-American finance specialist in 2013, the company, Teamable, develops special software used by businesses for hiring skilled workers. It allows them to look for and identify potential employees through their social media accounts.
Teamable currently employs 36 people working at its offices in Yerevan and San Francisco. Most of them are software engineers based in the Armenian capital.
The company announced on Wednesday that two U.S venture capital firms, True Ventures and SaaStr Fund, will invest $5 million in its operations.
Vazgen Hakobjanyan, one of the company’s founders, said on Thursday that the funding will result in “many jobs and new opportunities” in the sector. “The company has already had stable revenue for the last two years,” he told RFE/RL’s Armenian service (Azatutyun.am). “This business model has been tested and is working.”
Teamable already has over 50 corporate clients, among them the U.S. taxi network Lyft, the online payments operator Stripe and the Chinese-American Internet service provider Baidu.
“What sets Teamable apart is that our smart algorithms surface candidates based on the unique qualities and needs of each company, rather than keyword searches that yield candidate pools that are too general to be useful to recruiters,” the company’s Armenian-American chief executive and co-founder, Laura Bilazarian, was quoted by VentureBeat.com as saying.
Hakobjanyan stressed the importance of Diaspora Armenian involvement in the local tech industry. “Armenia has strong software developers, an open culture, an energetic generation [of young people] that wants to achieve big things, and a Diaspora,” he said. “We can achieve wonderful results if we use it correctly.”
“This is why we are saying [to the Diaspora] ‘come here not to give us money but to do business with us’ and it usually works,” added Hakobjanyan.
IT is the fastest growing sector of Armenia’s economy, having expanded by over 20 percent annually for over a decade. Around 15,000 people currently work for 450 or so IT firms operating in the country. Officials in Yerevan say they generated more than 4 percent of Gross Domestic Product last year.
The Armenian IT industry is dominated by subsidiaries of U.S. tech giants like Synopsis, National Instruments, Mentor Graphics and VMware. The sector’s expansion is also increasingly driven by homegrown Armenian companies like Teamable. More than 300 of them have reportedly been set up since 2007.
The most successful of these startups is PicsArt, one of the world’s leading mobile photo editing and sharing applications. The company now employs over 350 people in Armenia and boasts 90 million active monthly users worldwide.
Like Teamable, PicsArt has an office in San Francisco mainly dealing with sales, marketing and investor relations. It raised $15 million in venture capital funding in 2015 and another $20 million in 2016. Another Armenian software firm, CodeFights, attracted $10 million last year.
Industry executives say that the inadequate professional level of many graduates of IT departments of Armenia universities hampers even faster growth. According to their estimates, there are between 2,000 and 4,000 job vacancies in the sector at present.
In January this year, a team of government officials and IT executives proposed a wide-ranging reform of engineering education in Armenia aimed at addressing this personnel shortage. Prime Minister Karen Karapetian welcomed their plan.