As Europe considers how to stay competitive in the global tech race, a small but dynamic country on its eastern edge is quietly cultivating a startup revolution. If Europeans paid attention, it would be mutually beneficial.

Nestled in the South Caucasus, the landlocked nation of 3mn is home to more than 800 active startups and tech companies and enjoys a deep and growing bench of engineering talent that is also a legacy of its past, when it was an innovation hub of the Soviet Union. Its diaspora, giving it a strong edge, has already helped produce billion-dollar startups like ServiceTitan and Picsart, the former now listed on Nasdaq.

This foundation is being rapidly fortified. In 2025, the Armenian government doubled the budget of the Ministry of High-Tech Industry, reaching more than $120mn. Two landmark laws were also enacted to provide targeted state support for high-tech and IT sectors, offering tax privileges and employment incentives that create an even more favorable environment for growth. Armenia’s ambitions are no longer latent; they are being actively funded and structured.

At the same time, Armenia’s tech ecosystem is gaining unprecedented international visibility. This year, Armenian tech companies made a striking appearance at Mobile World Congress (MWC) Barcelona, one of the world’s premier technology showcases. Seventeen leading Armenian companies, backed by the Ministry of High-Tech Industry, exhibited together under a unified national pavilion. International interest was palpable.

The momentum is part of a broader trajectory. Armenia recently hosted the World Congress on Innovation and Technology (WCIT), a marquee event that brought global attention to Yerevan’s emergence as a serious player in the innovation landscape. Far from a regional afterthought, Armenia positioned itself as a connector between East and West, offering a business environment that blends dynamism with stability.

Yet despite these advances, Armenian startups remain disproportionately tied to Silicon Valley, with links to the European innovation ecosystem lagging far behind. European angel investors contribute over €11bn annually to early-stage companies — but Armenian startups receive a negligible slice. That presents a major opportunity for both Armenia and Europe, not only in terms of financial returns but also technological synergies and strategic resilience.

Why has the country not been on Europe’s radar? 

The lack of visibility around Armenia’s ecosystem may relate to the fact that the Armenia diaspora is concentrated in a few countries and Europe’s markets are not as integrated as the United States.  Also, some investors may  view the region through the lens of risk — geopolitical instability, or simply the perceived complications of a post-Soviet country. Conflicts and tensions with Azerbaijan haven’t helped.

But the truth is that Armenia is a democracy with a young, tech-savvy population and a hunger to scale. The barriers to engagement are not structural so much as rooted in legacy.  What’s missing is familiarity, which can open the floodgates. Once the sides engage, they would find cultural and geographic proximity, shared values, and a mutual interest in fostering innovation that is socially inclusive, economically productive and stabilising.

This is not entirely new. During the Soviet era, some referred to Armenia as the USSR’s "Silicon Valley”, developing advanced computers, microelectronics, and defence technology. In the last decades, a wave of returning diaspora engineers, startup founders and the rise of independent ICT firms led to a second wave of innovation. 

Today, Armenia boasts a dense web of incubators, accelerators and training centres. Some of them like the TUMO Center for Creative Technologies have also set up in Europe. Foundation for Armenian Science and Technology (FAST), Armenian Code Academy (ACA), the Enterprise Incubator Foundation (EIF), American University of Armenia's Entrepreneurship and Product Innovation Center (AUA EPIC), and Children of Armenia Fund (COAF) have been building a strong and sustainable talent pool. This ecosystem is connected to global accelerator networks like Berkley Skydeck, GITEX, YCombinator and 500 Global, and bolstered by local angel groups and venture capital investors (VCs).

The momentum is real: hundreds of millions of dollars were raised by Armenian startups in the past three years alone. While much of that was generated by diaspora founders, a growing share is homegrown. Programmes like Armenia Startup Academy and Plug & Play are helping local entrepreneurs scale faster, smarter and more globally.

European investors have the chance to partner and tap into a friendly, internationally-oriented talent pool in its east — and at the crossroads of major powers. It’s a strategically important location offering access to strong multinational talent.

Hoping to provide the spark, Armenia’s leading angel investor networks — Angel Investor Club Of Armenia (AICA), BANA Angels and Science & Technology Angels Network (STAN) — have joined forces with the European Business Angel Network (EBAN) and plan to host the EBAN Gateway to Europe Summit in Armenia  for the first time in September 2025. Leading European investors and experts would see the unicorns, accelerators, and growing AI sectors — the heart of a transformation from outsourcing to product-driven innovation. 

A handful of VCs have been operating in Armenia for more than a decade — some of them in the top deciles of international performance rankings. Initiatives like eqwefy, an investment platform that expands access for the broader investor base, further highlight the ecosystem's growing maturity and progress.

The case for deeper engagement with Armenia’s innovation scene is growing stronger. The ecosystem is there. The talent is real. What’s needed now is attention — and the willingness to build a mutually beneficial, and sustainable, relationship.

In an era when international relations may face strain, technology and innovation will remain key to progress and development. Investing with Armenia is more than an economic play. It’s a statement that Europe can further build.

Samson Avetian is the CEO of eqwefy, an Armenia-based investment platform, a Harvard MBA and an author.