Techstars Detroit, the accelerator that has funded 54 startups in the past five years, is shutting down, TechCrunch has learned.
In an email to supporters, Techstars Detroit managing director Ted Serbinski said the accelerator was not able to secure enough funding for 2020.
“It’s clear the entire automotive mobility industry is tightening as sales slump and we hit the trough of disillusionment with autonomy,” Serbinski wrote in the email. The sales and business development piece of the accelerator is working to build a new program in Detroit if “great corporates can be found,” he added.
Techstars isn’t disappearing from Detroit altogether. The company has a presence through events like Startup Week and Startup Weekends. Serbinski will continue to support the 54 startups that have come out of the program. A number of these startups are working on Series A rounds.
Serbinski will continue to work at Techstars, this time running an accelerator program focused on “quality of life” startups.
An excerpt from Serbinksi’s email:
An experiment for Techstars, Detroit showed you could build a world-class program in an emerging market, in a hyper-competitive industry, that was going through a transformational change.
More importantly, the program proved that wonderful and talented mentors from around the region and globe would graciously support the founders. Truly, an incredible community formed around this program and region. It’s wonderful to see all the new activity as Detroit continues to grow in startup and VC activity.
Techstars Detroit began in 2015 as Techstars Mobility, a mentorship-driven accelerator program that was supported by numerous corporate and auto-focused backers including Ford, Honda, Lear and Nationwide as well as global partners such as Amazon’s AWS, Silicon Valley Bank and Microsoft for Startups. The intent was to bring attention and business into Detroit, a strategy that Serbinksi told TechCrunch was successful.
“The Detroit program was an experiment from the start,” Serbinski said in an interview Wednesday. “The experiment was could TechStars run an accelerator with multiple corporate partners in an emerging market that had a lot of potential, but a significant amount of unknowns? Over the last five years, it became clear that you can work with multiple corporates, you can be in a hyper competitive auto industry, Detroit has momentum and Silicon Valley isn’t waiting anymore. A lot of that proved out.”
Serbinksi’s portfolio is diverse and global. For instance, the startups in the portfolio are from 11 different countries and 40% have female founders. Of the 54 startups Techstars Detroit invested in, just one is from Detroit and two are from Michigan. Serbinksi added that he was not tied to a single thesis that “autonomy is going to take over today” and instead focused on what would work “today and tomorrow.” In other words, he didn’t heavily weight the portfolio with startups focused autonomous vehicle technology, which could take 10 to 15 years to turn into a product.
The portfolio has had success with less than 10% of startups shutting down. Some of the successful accelerator graduates include Cargo, Acerta and Wise.
In 2019, Serbinski announced the name was changing to Techstars Detroit to diversify even more. The new broader aim was to look for startups “transforming the intersection of the physical and digital worlds that can leverage the strengths of Detroit to succeed.” It could be more than just mobility.
“The word mobility was becoming too limiting,” Serbinksi wrote in a blog post at the time. “We knew we needed to reach a broader audience of entrepreneurs who may not label themselves as mobility but are great candidates for the program.”
Even as the accelerator diversified, Serbinski said, it was becoming more difficult to attract investments from the automotive industry.
“We were talking to a healthy amount of new partners for this year and all of those conversations went to zero,” he said. “I’m seeing a tightening of innovation budgets around automotive and mobility because we’re entering that trough of disillusionment for autonomy. And so, with less accessible money, it made it a lot harder for us to fill in that gap.”
Comments
Post a Comment