TOPCLAPS has learned that Techstars is laying off 17% of its workforce and will end its $80 million J.P. Morgan-backed AdvancingCities program once the fund is completely deployed at the end of this year.
Launch and Objectives of AdvancingCities Program
The AdvancingCities program, which launched in 2022, saw the launch of accelerator programs across the nation in cities like Oakland, New York, Miami, and Washington, D.C., to back more diverse founders.
Techstars Sour Relationship with J.P. Morgan
J.P. Morgan sponsored the program with a commitment through December, but the relationship between the bank and Techstars soured almost immediately, as previously reported. It didn’t commit by that earlier deadline. As of our earlier report, the fate of around 20 Techstars employees who worked on the program was unclear.
J.P. Morgan’s Statement on the Program
“In 2022, J.P. Morgan announced the $80MM Advancing Cities Fund, raised as a private placement to invest in a Techstars accelerator program focused on advancing equitable access to funding among diverse founders across the U.S.,” a J.P. Morgan spokesperson told . “The fund is expected to be fully deployed by the end of this year, as planned. JPMorgan Chase remains committed to supporting across the country by expanding its diverse manager network, private investments platform, and engagement capabilities.”
Techstars Internal Communication and Layoffs
In an email about the layoffs, Techstars co-founder and CEO David Cohen told staff that the startup accelerator “overbuilt and overhired.” He said most of the layoffs would come from engineering, support services, and those working on sales and partnerships. He promised that those running most accelerator programs would not be impacted, except for the J.P. Morgan programs, specifically the AdvancingCities program.
Recent Transformations at Techstars
The news comes during a transformative year for Techstars. ’ now-former CEO, Maëlle Gavet, stepped down in May, with Cohen stepping back into the role upon her departure. As reported, Wednesday’s layoff also follows a 7% headcount reduction in January.
Techstars Strategic Shift and Future Focus
Techstars’ strategy under Gavet was to scale into more programs and back more startups. Still, the investment community criticized the organization’s strategy as it began to restructure itself earlier this year. Cohen somewhat addressed the criticisms in that email to staff today, saying that the firm would now “stop focusing on scaling and shift all of our focus to being better for founders each and every day.”
