Techstars pauses Berlin and Paris accelerators

Techstars, the global startup accelerator and VC firm which provides funding and support for early-stage startups, is pausing its accelerators in Berlin and Paris, marking a blow to the European startup ecosystem.

Techstars has made the decision to halt the two accelerators amid funding challenges and a restructure of the 19-year-old New York-headquartered firm, which has faced criticism in the media over its corporate culture, which Techstars admitted “raised valid concerns”.

The move is a blow to the European tech ecosystem, which has a shortage of venture funding willing to back early-stage startups and is being outmuscled by the US in later-stage funding.

Techstars founder David Cohen, who returned as CEO last year, said that a "challenge, like many in the industry today, has been raising capital for our own funds in the current market while we refocus the business.  

He added: “Driven by our desire to help founders succeed and our focus on better rather than bigger, we made some difficult decisions about where we would operate our accelerators during the lifecycle of our latest fund. We’ve decided to pause our accelerators for the duration of our latest fund in Berlin and Paris."

Techstars, which operates accelerators around the world, will continue to operate its accelerators in London, Amsterdam and Tel Aviv. It is also restarting its accelerators in Chicago, Boulder and Atlanta and now operates accelerators in nine countries. Under its new structure, it will invest more funding in fewer startups.

The move will impact four jobs, according to a Techstars spokesperson, who said they didn’t expect the Berlin and Paris accelerators, which are backed by a Techstars institutional fund, not by corporate partnerships, to return until at least 2026.

Techstars has run its Berlin accelerator since 2015, backing 218 startups with a combined market cap of over $2.7bn and its Paris accelerator since 2018.

Techstars' accelerator programmes typically run for three months, in which startups receive $220,000, (which was increased by $100,000 this year), along with mentorship and access to alumni founders and its corporate partners.

Techstars has faced criticism about its culture under the previous CEO Maëlle Gavet which saw the shuttering of programmes and an exodus of staff.

In a blog post, Cohen addressed this, saying: “There’s no fast track to rebuilding trust with your employees, your customers, or the market.

“The only way we could approach it was with transparency and honesty.  We looked in the mirror and asked ourselves hard questions.

“Internally, that meant facing what hadn’t worked. Externally, it meant listening more than talking and letting our actions speak louder than words. Progress comes from showing up consistently, living your values, and fixing what’s broken. This is what we have been doing for the past year.”

Techstars said it remained committed to the European startup ecosystem.

It said: "We are deeply committed to the European ecosystem, and are continuing to run accelerator programs in London, Amsterdam, and Torino. We also recently announced two new startup community partnerships in Sarajevo and Istanbul."

Techstars has backed 21 unicorns and 118 companies currently valued at over $100 million each.