While Armenia’s Ministry of High-Tech Industry still refuses to provide the names of IT companies that received government financial assistance, Hetq has compiled a list of 111 companies that received taxpayer money and the amounts of such largesse.

Here, we name the top five receipients.

It’s more than surprising that the above ministry isn’t aware that such data, the contracts signed between the companies and the IT ministry, is available on the Ministry of Finance’s Armeps website.

On December 1, 2022, the Armenian government adopted a decision to provide 10 billion drams of state support to organizations operating in the IT sector. The need for support was explained by the losses suffered by the companies, which were caused primarily by the devaluation of the Armenian dram against the dollar. (AMD 10 billion=US$25.9 million at current rate).

Despite Hetq’s many requests, the ministry has avoided providing the names of the companies receiving this assistance and the amounts.

The ministry first argued that the applications are still being studied, and then, that not all companies have signed contracts. On May 29, Narek Melkumyan, Secretary General of the Ministry of High-Tech Industry, replied that the list of companies and the information about the amount of support they received contain trade secrets.

Hetq then filed a lawsuit against the ministry to release the data.

Earlier, the ministry noted that the applications of 321 companies met the requirements. That means that in addition to the 111 contracts we found, there are still 210 contracts to be published.

Picsart, a platform offering online photo and video editing services, and Energy Global Services CJSC, received the largest support - 400 million drams (US$1million) each.

Picsart

Picsart is wholly owned by Picsart Inc. registered in the U.S. Hovhannes Avoyan, born in Armenia and an IT veteran, co-founded the company in 2011 and serves as its CEO. He owns 37% of the parent company.

Picsart is the 66th largest taxpayer in Armenia, paying some 4.1 billion drams in taxes to the state budget in one year. Thus,10% of the taxes paid by the company were returned to it in the guise of assistance.  

In August 2021, Picsart announced $130 million in venture capital funding, incraesing the company's market value to $1.5 billion. The company has employees and offices both in Armenia and in the USA.

 Avoyan, in his correspondence with Hetq argues that while the IT sector in Armenia is experiencing quite dynamic development, this doesn’t mean state support isn’t needed.

"Given the current difficult economic situation, state support to the IT sector is quite in demand and effective. The greater the support, the greater the positive economic and financial returns from the IT sector to the country," Avoyan tells Hetq.

He emphasized that state support makes Armenia’s IT sector more attractive and promotes foreign investments, a main requirement for the country's development today.

Hetq also asked Avoyan whether the company has received the 400 million drams. He declined to answer, suggesting we contact the company director.  We have not received a reply to our letter to the director.

Energize Global Services

Energize Global Services, which offers software services and products to the banking and financial management industry, is headquartered in Yerevan. It was founded in 2007 and has four hundred employees.

It’s 53% owned by Richard Bezjian, Chairman of the Board of Trustees of the Children of Armenia Fund (COAF).

Service Titan East, Grid Dynamics, Crisp

Service Titan Arevelk (East), a branch of ServiceTitan, (a US-based all-in-one, cloud-based software for residential home service businesses) received 389.4 million drams.

Founded by Vahe Kuzoyan and Ara Mahdessian, the company opened an office in Armenia in 2019. The company’s estimated value is $9.5 billion.

306.8 million drams was allocated to GDAM LLC, a branch of Grid Dynamics, registered in Switzerland. Grid Dynamics has been operating since 2006 and is headquartered in Silicon Valley. The company provides digital services in big data analytics, search, artificial intelligence, cloud migration and application modernization.

Krisp LLC received 242.5 million drams. It’s the Armenian subsidiary of Krisp Technologies Inc. registered in the U.S.

The company offers software solutions that provide noise, voice and echo cancellation and more to individuals and businesses.

The company was founded in 2017 in Yerevan by Davit Baghdasaryan and Artavazd Minasyan, and is based in Berkeley, California.

Photo: Minister of High-Tech Industry Robert Khachatryan; Photo credit - Tirayr Muradyan