Impact Investing

26.02.2025

Impact Investing

Supporting Social Entrepreneurs in Armenia

While a conventional approach to investment calculates discounted net values and focuses on a financial return, Armenia is gradually witnessing the rise of impact investing, with enterprises funded for the social and environmental issues they help solve in addition to their commercial results. We spoke to the team at Impact Hub Yerevan regarding the work they are doing in this area through an initiative called VIA Fund.

Text : Nazareth Seferian
Photo : Impact Hub Yerevan


It is no secret that Armenia, like every country in the world, faces a range of social and environmental challenges, like poverty, lack of accessible quality education, pollution, and so on. In the recent past, a new movement has evolved to tackle such issues—social entrepreneurship. Social enterprises are businesses that have a social or environmental problem as their core mission along with a value proposition in the market that allows them to make revenue while contributing to that problem’s solution.


An impact investment discussion at Impact Days in Vienna, June 2022



Aregak Bakery and Café in Gyumri is one of the leading social enterprises in Armenia. “Our mission is simple but powerful. We want to change stereotypes and provide workplaces for vulnerable groups and people with disabilities in Gyumri. By offering employment for vulnerable groups, we actively work towards reducing inequality in our community,” said Tigranuhi Hakobyan of Aregak Bakery and Café.
If you visit the café, you will see what many similar spots in Yerevan would offer—fresh croissants, good coffee, and a warm atmosphere. But what is different is that you will be served by young men and women with Down’s syndrome, cerebral palsy, and other conditions that were, until recently, considered by many in Armenia to mean a lifetime of solitude and isolation. Thanks to the team at Aregak Bakery and Café, there is a whole new level of visibility for people with disabilities in Gyumri, which is leading to more awareness and less discrimination. 

 

       
                              Aregak Bakery and Cafe is very popular in Gyumri                                                                                 Social entrepreneurs undergoing training
                                                                                                                                                                                                      at Impact Hub Yerevan 

“Social entrepreneurship is an exciting field because it can lead to very innovative and successful businesses while also tackling serious issues in the country. Impact Hub Yerevan has a mission to support social entrepreneurs in the country – a key area of our focus for the past ten years,” said Gevorg Poghosyan, CEO of Impact Hub Yerevan, “When we started the Collaborate for Impact project with support from the European Commission and our partners, Impact Europe, we began to dive deeper into the issues of sustainable financing for social enterprises, and we came to the conclusion that Armenia needs a healthy impact investing ecosystem to meet the challenges our country faces.”

Indeed, when a social business like Aregak Bakery and Café needs funding, going to a bank is usually not the best option. The banking system in Armenia does not currently have any financial products that consider or appreciate impact, nor do they understand the specific difficulties faced by social entrepreneurs.

“Globally, there is a gap in funding of more than 1 trillion USD when it comes to the needs of social enterprises. If this funding becomes available, it can go a long way to achieving the Sustainable Development Goals to which the international community has committed. We decided to lead the way on this issue in Armenia,” said Poghosyan.

 

           

Gevorg Poghosyan and Tijay Jeghelian                                                 An Impact for Breakfast discussion at Impact Hub Yerevan
 

Impact Hub Yerevan took action on several fronts to grow an impact investing community in Armenia. Thanks to funding from the European Union, they took several investors from the country to large impact investing conferences in Vienna, Brussels, Torino, and Bilbao, giving them a major opportunity to learn from experts in the field and network with peers from other countries. Impact Week, organized by Impact Europe, is a major event on the calendar of most impact-oriented funds, bringing together around one thousand people to discuss how the world’s social problems can be solved by providing the right kind of support. This is not just about tailored funding; social enterprises also need non-financial support like training and mentoring, along with an optimal approach to impact measurement.

“Taking our stakeholders to Impact Week allowed them to see the wider world of impact investing, inspiring the possibilities that this holds for Armenia. Over the past years, we’ve also organized several panel discussions and other events in Yerevan on various aspects of impact investing, allowing local companies and organizations to learn more about this topic. Finally, we launched VIA Fund in December 2022 – the first impact fund for social enterprises in Armenia,” said Gevorg Poghosyan.

This approach has proven quite effective. Kirk Wallace had been providing support to various initiatives through the Whitt Family Foundation for a few years when he got an invitation from Impact Hub Yerevan. “I was asked if I wanted to attend an impact investing conference in Vienna and I decided to go. I learned a lot there and was inspired to take a different look at how I approached my work in Armenia. When Impact Hub Yerevan launched VIA Fund, I was the first to confirm my financial contribution!” said Wallace.

While securing the necessary finances is important when it comes to funding social enterprises, Impact Hub Yerevan also actively develops the pipeline through various incubation and acceleration programs. “Many of the social entrepreneurs we see are self-taught – they know the problem well and have a passion to tackle it, but they need to learn about effective approaches to business, impact measurement, and so on,” said Tijay Jeghelian, Director of Programs at Impact Hub Yerevan, “We provide several months of comprehensive training followed by regular mentoring to make sure that our social enterprises are well prepared to grow and maximize the impact of the financial support they receive from VIA Fund.”

The support that VIA Fund provides aims to help social enterprises grow both in terms of business as well as impact. “Thanks to VIA Fund, we are training three more individuals with special needs, who will be able to gain employment with us,” said Tigranuhi from Aregak Bakery and Café. 

 


An impact investment discussion at Impact Days in Vienna, June 2022

 

“For the moment, we’re arranging a combination of grants and zero- or low-interest loans for our investees. We’re continuously evolving as a fund and looking forward to the day when we can go into equity investments. From Day One, we are seeking to respect the main principles of impact investing – intentionality, additionality, and measurability. Our funding is intended for specific impact, which would not have happened without that funding, and which needs to be clearly monitored and measured,” said Gevorg Poghosyan.

Homeland Development Initiative Foundation (HDIF) was one of the first social enterprises in Armenia, empowering more than 150 women across the country by helping them produce a variety of handmade items that HDIF then sells around the world. “We relied heavily on exports and were doing quite well a couple of years ago until a couple of our big European buyers had financial issues and closed operations. Thanks to VIA Fund, we were able to experiment with local sales and secure a new stream of income that will hopefully now lead to more growth and further opportunities for the women that do this wonderful work in the regions of Armenia. As a result of the support from VIA Fund, our local sales have doubled over the past year and we are constantly adding new points of sale in the country,” said Tim Straight, founder of HDIF.

With 15 companies in its portfolio and more in the pipeline, Impact Hub Yerevan is inviting more individual and institutional investors to join the impact investing movement in Armenia. “This is a meaningful way to contribute directly to the national economy while helping solve serious challenges in the country,” said Gevorg Poghosyan.
 

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