Techstars, a renowned startup accelerator, is raising $150 million for its new fund. According to SEC filings, the accelerator is seeking fresh capital ahead of the end of the deployment period of its third institutionally-backed fund, Techstars Accelerator 2021, later this year.
Background on Techstars’ Funds
Techstars declined to provide details on how it intends to use or deploy the funding, citing regulatory restrictions. However, like its predecessors, the new fund, Techstars Accelerator 2024, is expected to be used for accelerator-stage and/or post-accelerator investments.
Notable Trends in Techstars’ Investment Strategy
Notably, the Boulder-based early-stage investor has used its current fund only for accelerator-stage investments. Its previous funds backed startups both during the accelerator stage and with follow-on investments after the program.
Fund 3 aimed to back more than 800 pre-seed and seed startups that are part of its global accelerator programs by the end of 2023. Through its accelerator groups, Techstars has so far backed over 3,500 early-stage startups in various sectors, including health tech, fintech, web3, and clean tech.
Key Benefits for Startups Participating in Techstars’ Program
Startups going through Techstars’ three-month program receive $20,000 and a $100,000 convertible note in exchange for 6% to 9% of common stock, in addition to access to its network and mentorship, amongst other resources.
Expansion Plans and New Initiatives
Founded in 2006, Techstars runs more than 50 accelerator groups in major cities across the globe, including New York, Los Angeles, London, Boston, Tel Aviv, and Lagos. The accelerator launched the Lagos arm last year in partnership with ARM Labs as part of its plan to expand its specialist and generalist programs globally.
To double down on its growth and expansion plans, Techstars recently launched new funds to bolster its investment efforts. Last year, for instance, it launched Rising Stars, a fund to back startups that are too early for its accelerator programs. Under this fund, Techstars will issue $100,000 checks in exchange for 7% to 10% equity.
The accelerator also launched the $80 million Advancing Cities Fund in partnership with JPMorgan to back over 400 startups by diverse founders in nine cities across the U.S.
New Leadership and Growth Strategies
Techstars has named Maëlle Gavet as its new CEO, as the accelerator group looks to expand. The appointment of a new leader is expected to drive growth and expansion plans, including the launch of new funds and initiatives.
Conclusion
The raise by Techstars underscores the growing demand for startup accelerators and early-stage investment in various sectors. With its extensive network and resources, Techstars is well-positioned to support startups globally, driving innovation and growth in key areas like health tech, fintech, web3, and clean tech.
About Techstars
Techstars is a global accelerator with over 15 years of experience supporting early-stage startups through its programs. With more than 50 accelerator groups across the globe, Techstars has established itself as a leading player in the startup ecosystem.
