Earlier this week, global early-stage technology startup accelerator and investor Techstars announced significant changes to its operations and strategy. Those changes appear to have impacted its presence in Toronto.
Techstars plans to shut down some of its accelerators and move its corporate headquarters from Boulder, Colorado to New York City as part of a renewed focus on some of the world’s largest tech ecosystems, according to a statement from Techstars CEO Maëlle Gavet. Gavet added that Techstars will keep running programs in 30 other locations in addition to its core cities in 2024 but did not disclose which locations would be impacted or its plans beyond this year.
Long-serving Techstars Toronto managing director Sunil Sharma confirmed to BetaKit that the accelerator is not accepting new applications at this time and he is transitioning away.
By focusing on the biggest tech ecosystems and “phasing out some accelerator programs in a few smaller venture markets,” Gavet said that Techstars aims to ensure its entrepreneurs are “surrounded by the highest concentration of [venture capitalists], startups, talent, mentors, and support.”
While Techstars Toronto is not shutting down imminently in the wake of these changes, it has paused its accelerator programming for the time being, and its long-term future in the city remains to be determined, BetaKit has learned.
Long-serving managing director Sunil Sharma confirmed to BetaKit that Techstars Toronto is not accepting new applications at this time and that he is transitioning away from Techstars after seven years at the helm, but did not confirm if the accelerator will close its doors for good. Sharma said he is currently considering what he plans to do next, but noted that he intends to continue to support the Canadian tech ecosystem.
Despite these changes, Sharma believes that Canada will continue to be a focus for Techstars going forward, noting that Techstars has invested in 250 Canadian startups to date.
“I am confident that the number of Canadian companies who are supported by our many programs will continue to grow, as Techstars has proven itself to be a big believer in Canadian founders and is actually increasing the total number of investments it is making,” Sharma told BetaKit.
GeekWire reported that Seattle and Boulder are among the accelerators that Techstars is shutting down. A memo obtained by GeekWire indicated that Techstars intends to concentrate its efforts on its accelerators in San Francisco, New York, Boston, and Los Angeles.
According to Gavet’s statement, the changes are “the result of two years of internal analysis, planning and listening to our stakeholders.” Despite scaling back, Techstars said it still intends to support smaller ecosystems and founders from around the world by getting them to relocate to other cities and through its hybrid Techstars Anywhere program.
RELATED: Techstars Toronto celebrates 100 direct investments as an accelerator
Gavet did not respond by press time to requests for comment from BetaKit on Techstars Toronto’s future.
Speaking on background with BetaKit, multiple sources familiar with Techstars Toronto said that they do not expect the Toronto accelerator to continue serving new cohorts beyond 2024 or at all, but believe that any wind-down of its operations in the city could take some time.
Multiple sources from across the Canadian tech ecosystem have expressed concern to BetaKit regarding the long-term future of Techstars Toronto given its impact over the past seven years and its importance to the local tech ecosystem.
Techstars Toronto’s impact on the local tech ecosystem over the past seven years has been undeniable. Last year, Techstars Toronto celebrated 100 direct investments into Canadian and international startups.
Techstars offers three-month accelerator programming for startups in more than 30 cities around the world, investing $120,000 USD, taking an equity stake in participating companies, and providing them with mentorship and access to its vast global network. It claims to be the world’s most active pre-seed investor, backing over 4,000 nascent tech firms to date.
Techstars Toronto launched back in 2017 in partnership with Montréal-based Real Ventures, running its first program the following year. That partnership has since concluded, and the accelerator has been supported by Techstars’ $150-million global fund. Techstars is currently raising a new $150 million third accelerator fund.
The Toronto accelerator has supported and invested in a wide variety of Canadian tech startups, including Balance, Captain AI, Cinchy, Fable, Inkblot, KitchenMate, and Tread. Techstars Toronto began expanding its capacity in 2021 to increase the size and frequency of its cohorts.
The full statement from outgoing Techstars Toronto managing director Sunil Sharma follows below.
Techstars is now one of the most active startup investors in Canadian history. We have made about 250 direct investments into Canadian startups and I am proud to have led 100 investments from the Toronto program. That said, I will be transitioning away from Techstars after almost 7 strong years supporting startups from Toronto, across Canada and from 15 different countries across the world.
Canada is a brand that resonates globally and that represents an investment thesis in itself. The global diaspora is what makes us truly great and this trend will only increase from here.
I am confident that the number of Canadian companies who are supported by our many programs will continue to grow, as Techstars has proven itself to be a big believer in Canadian founders and is actually increasing the total number of investments it is making. My personal belief has always been that accelerators are useful for expanding networks and making connections and it’s about more than just the money. Canadian founders are often best served to spend time in different countries to expand their businesses and meet new people.
At this time Techstars Toronto is not accepting new applications. As for me, I am actively thinking about what to do next but I do plan to continue to help the ecosystem.
Feature image courtesy Techstars Toronto.
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