The ARM Labs Lagos Techstars accelerator, which was launched in 2022, has made the decision to shut down after running two successful cohorts. This decision comes as a surprise to many, especially considering the promising startups that were part of the programme.
The accelerator programme had attracted a lot of attention due to its generous funding opportunities. Startups in the programme were able to receive up to $120,000 in funding, along with access to $400,000 in cash equivalents and additional benefits of $5 million. Some of the notable startups that were part of the programme include Surge Africa, 24Seven, Beauty Hut, Jump n Pass, Press one Africa, Eight Medical, One Plan, Rana, and CDCare.
Matthew Grossman, the Global Chief Brand and Communications Officer, announced the shutdown of the accelerator programme via email. He mentioned that Techstars’ partnership with ARM Labs Lagos has come to an end and they will not be proceeding with the third accelerator programme. Despite the closure, he acknowledged the outstanding companies and founders that were supported by dedicated mentors during the first two cohorts.
Techstars, known as one of the most active investors globally, is now refocusing its efforts on cities with a high concentration of VC activity. This shift in focus has led to the closure of several accelerator programmes in cities like Austin, Toronto, Seattle, Sweden, Boulder, and Norway. Additionally, about 17 percent of its staff were laid off following the end of an $80 million accelerator partnership with J.P. Morgan.
The decision to shut down certain programmes and lay off staff comes after Techstars failed to meet its revenue target in 2023. In response to this, the company is implementing cost-cutting measures and strategic retreats from various geographic markets.
In May 2024, Maelle Gavet stepped down as CEO of Techstars, with Co-founder and Board Chairman, David Cohen, taking over the role. The company is now focusing on its core strengths and areas of expertise, with a two-term schedule in place. This involves cutting programmes worldwide and shutting down accelerators as part of a strategic retreat from certain markets.
While the closure of the ARM Labs Lagos Techstars accelerator programme is disappointing, it has undeniably contributed to the success of many entrepreneurs in Nigeria. The programme has also played a key role in connecting startups, investors, and corporations, creating an environment where startups can thrive.
