Global accelerator Techstars decided last Wednesday to shut down its programme in Sweden effective immediately — putting staff, mentors and a 30-member cohort that started just weeks earlier into limbo.
Now, Sifted has learnt that Techstars will continue the current cohort but will close its Swedish business after that. Techstars confirmed this decision.
The current programme will continue in a hybrid form. Participants can stay in Stockholm with parts of the local Techstars team on the ground, as well as support from managers from the accelerator’s global network.
The decision to continue the current cohort was met with relief from a majority of founders enrolled.
“It’s been crazy. As a founder, you always have ups and downs. This has been one of the lowest points in the last two years, but it has also proved that we have resilience,” Mario Calderon, cofounder of Skillmapper, tells Sifted.
“I am very happy that Techstars is turning around on their decision and assuming responsibility for the startups that they have invested in. I hope that they also do whatever they can to explain what is the reasoning behind this debacle and why they didn’t take this direction from the beginning,” Techstars mentor Jonas Almeling says.
Last year Techstars invested about $80m in about 750 startups that participate in its three-month programmes and follow-on investments. It’s backed 3,400 companies since 2006. The company has almost 50 accelerators in a dozen countries around the world. Its presence in Europe includes programmes in Paris, London, Berlin, Oslo and Amsterdam.
Frustration in the community
When the programme was cancelled suddenly last week — “due to the unique complexity and relative high costs of the market”, Techstars said at the time — founders and mentors told Sifted it came as a shock. Some participants had flown in from as far away as France and Spain. They were told that they could either continue the programme remotely or get a refund.
One mentor for the programme described the situation as a “shit storm”.
The decision to pull out of Sweden mid-programme also created a sense of distrust within the Techstars community.
“The concern everyone has right now, do I need to remove Techstars from my LinkedIn — do I want to be associated with that company?” one person in the Techstars community tells Sifted.
“Techstars is supposed to mean something and what is the concern right now is how to help those early-stage startups.”
Not attracting enough local startups
According to a person close to Techstars leadership, one of the reasons Techstars is withdrawing from Sweden is that it was unable to attract enough local companies to participate. Only 25% of the portfolio companies were Swedish, Sifted has learnt.
Furthermore, the Stockholm programme did not have a corporate sponsor for the programme, unlike many other smaller cities where Techstars has an accelerator.
“I hope they can get the trust back and focus on what matters now — preparing those 12 founder teams to build great stuff. It’s a shame this will be the last cohort, as this will be a great loss for the Nordic and Baltic ecosystems,” another mentor tells Sifted.
Mimi Billing is a senior reporter at Sifted. She covers the Nordics and healthtech, and can be found on Twitter and LinkedIn
Correction Mar 30: paragraph 13 has been amended to accurately reflect the source of the information about the reasons behind Techstars's withdrawal.
