Techstars — a global accelerator that's backed unicorns like Remitly and Sendbird — announced yesterday that it was shutting down its programme in Stockholm immediately, despite a new cohort having just started the course.
"We have made the difficult decision to close the Stockholm accelerator due to the unique complexity and relative high costs of the market,” Techstars tells Sifted.
“This is not a decision we take lightly as we know it is disruptive to the founders on the programme. They have been given the option to continue through a virtual programme specifically for them or if they choose, to receive their equity back."
The Swedish branch of the accelerator, which opened in the autumn of 2021, welcomed a new cohort of 30 founders just weeks ago. The startups enrolled in Stockholm include founders from France, Spain, Estonia and Sweden who had travelled to the city to attend the sessions in person, according to participants.
Whatever goes on behind the scenes, there must have been other possible solutions to this
Members of the ecosystem were surprised at how abruptly Techstars’ decision came. Some international mentors who had flights for Stockholm booked on Thursday morning said they found out by email on Wednesday evening that all sessions for the programme had been cancelled.
“This is incredibly unfair to the startups, many of them changed their lives and left their countries to come to Stockholm. Whatever goes on behind the scenes, there must have been other possible solutions to this,” one mentor tells Sifted.
Every year Techstars invests about $130m in 500 or so startups that participate in its three-month programmes. It's backed over 3,000 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.
Founders shocked by the decision
The founders that joined the latest Techstars cohort in Stockholm found out in person at Wednesday lunchtime that the programme had been discontinued.
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“It felt like the rug had been pulled out under our feet — we were in a bit of a shock,” says one of the founders enrolled on the programme. “We still haven’t received a written confirmation.”
Founders that Sifted spoke to described how much they'd enjoyed the first week and a half of the programme and that they think it was unfair on the local Techstars team.
“It was an amazing programme with such a diverse group of founders,” says Saaya Sorrells-Weatherford, cofounder of Emigreat.
It felt like the rug had been pulled out under our feet
“We are startups and ready for a rollercoaster, but the local Techstars team has been so amazing and this hurt us the most,” said Maarit Mäeveer-Eller, cofounder of Votemo.
Mario Calderon, cofounder of Skillmapper, flew in from Spain to join the programme in Stockholm and he hasn’t decided yet whether to leave, stay on with the hybrid programme or join another Techstars location yet.
“It was shocking, this was not what we were expecting,” he says. “If we stay depends on what Techstars will offer us, and we’ll find out in the next few days."
A difficult place to settle
Not all Techstars accelerators are financed by Techstars itself. Some are financed through partnerships with banks like ABN AMRO in Amsterdam, Barclays in London (for its 2020 accelerator) and other large corporates like Equinor in Oslo.
Stockholm’s accelerator didn't have any sponsors — which means it had to make money out of the startups enrolled on the accelerator.
Pär Hedberg, founder of accelerator Sting which has been running for 20 years, believes that Stockholm isn't as easy a place to launch an accelerator as it may look at first glance.
“Stockholm has a startup ecosystem that is very mature and that is sometimes underestimated. It’s not easy to carve out a position for your accelerator here due to the fierce competition,” he says.
Sting, Norrsken Impact Accelerator and Antler are three who have managed to survive in Stockholm. Members of the ecosystem say those have been the winners because Sting had a first-mover advantage, Norrsken has a specific impact focus and Antler is more of a company builder.
Others haven’t done so well. US accelerator 500 Startups launched in Stockholm in 2016 — and was gone one year later.