Banking in the Cloud: Armenian Fintech Start-Up Highway Raises $2 million

Photo: Highway Founders

Highway, a Yerevan-based fintech start-up, has announced the closing of a seed funding round of $2M. The company, which specializes in building a cloud-native composable core banking platform, enables client banks to enhance their digital capacities and transform from legacy systems. The funding round was led by private investors.

Founded by Armenian entrepreneur Davit Baloyan, Highway aims to tap into the massive embedded finance market, which is expected to grow to $7.2 trillion by 2030 according to a forecast by embedded finance expert Simon Torrance. Baloyan is an experienced banking executive with a focus on digital banking and has successfully launched digital products in Armenia before, including point of sale lending and QR payments system. He was joined by four other co-founders at Highway, with the goal to grow the company into a large international player in the fintech industry.

“We are happy to close this funding round which will allow us to continue growing our team in Armenia and focus on expanding our business in our target markets. We see a huge opportunity for growth globally as many incumbent banks today are stuck with their legacy core banking platforms and are missing out on the game to new challenger players. We are here to empower and help banks to build more innovative and customer-friendly products,” Baloyan said.

Revolutionizing Embedded Finance

By positioning itself in the niche of core banking infrastructure, the company is eager to secure its place in the growing fintech landscape. “The reason is that embedded finance enables any brand or merchant to rapidly and at low cost integrate innovative financial services into new propositions and customer experiences. If you are a bank, this means that you can set up new business in a new market very quickly. However, this kind of action requires a totally different core banking system compared to the traditional systems,” said Baloyan. “We are building our core system with exactly this aim – to support embedded finance, to support open banking, to support banking as a service. We are a “highway” for banking services, for everyone from everywhere,” he continued.

Highway’s team is currently based in Armenia, where the company has focused its hiring. By the end of 2022, the management plans to grow its team to about 50 members, all in Armenia. “We are very proud of our team in Yerevan and see that the talent market still has much more potential to grow here,” Baloyan remarked.

Avetis Ovakimyan, Chief Product Officer and co-founder, described the main advantage of their solution to be the fact that it is built by bankers for bankers. With a 10-year background in risk and finance functions across different markets, Ovakimyan believes that next-gen cloud-based core banking systems have the full potential to become alternatives to traditional core banking systems. In terms of reliability, traditional/legacy core banking systems have done their job perfectly and we have rarely seen any major failures over the last couple of decades. However, with the advent of digital banking, cloud, and APIs, banks have seen a significant shift in the way banking products and partnerships are constructed. “This is exactly where we step in,” said Ovakimyan.

Arthur Hakobyan, the firm’s CTO with 15+ years of experience in IT joined Highway in April 2021 as a co-founder. He proposed that the technology that most banks are using today is obsolete, the architecture is monolithic, complex, and convoluted, and requires highly specialized engineering teams in every area. Any small change entails endless effort and brings headaches to clients. 

“One of the key goals we have at Highway is to make a platform which is service independent and self-contained. It must be extremely easy to select and utilize each component. We have a “Lego brick” development approach to building services using top technologies to decompose an application into smaller services instead of heavy applications. Using the latest technologies and standards will allow Highway’s clients to get products, integrate APIs and launch new services without any difficulties and minimum time,” he said.