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, TechCrunch has learned.
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. with the goal of backing more diverse founders.
J.P. Morgan sponsored the program with a commitment through December, but the relationship between the bank and Techstars soured almost immediately, as TechCrunch previously reported. The bank was supposed to commit to continuing the program last summer so Techstars could start fundraising for another round with the hope of deploying capital from the second round in 2025. But 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.
“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 TechCrunch. “The fund is expected to be fully deployed by the end of this year, as planned. JPMorganChase remains committed to supporting across the country through the expansion of its diverse manager network, private investments platform and engagement capabilities.”
The news that the program was officially shut down was reported on Wednesday by The Information.
In an email about the layoffs, Techstars co-founder and CEO David Cohen told staff that the startup accelerator “overbuilt and over hired.” He said that 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 with the exception of the J.P. Morgan programs, specifically the AdvancingCities program.
The news comes during a transformative year for Techstars. Techstars’ now-former CEO Maëlle Gavet stepped down in May, with Cohen stepping back into the role upon her departure. Wednesday’s layoff also follows a 7% headcount reduction in January, as TechCrunch previously reported.
Techstars’ strategy under Gavet was to scale into more programs and back more startups, but it was met with criticism from those in the investment community as the organization began earlier this year to restructure itself. 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.”
Techstars declined further comment but pointed to Cohen’s email which it published on its website.
Source : Techcrunch
