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What Techstars Exit Means for African Startups

November 4, 2024

What Techstars Exit Means for African Startups

Techstars has ended its Lagos accelerator program, closing out a two-year run of investing in early-stage African startups.

While this signals the end of its physical presence in Nigeria, Techstars plans to keep supporting African founders through its global network. But this exit leaves a big question

Launched in December 2022, the program in partnership with ARM Labs supported early-stage startups in Nigeria and across Africa.

Over two cohorts, Techstars invested roughly $2.4 million in 24 startups, providing each with up to $120,000 in funding, mentorship, and access to a global network.

Why is Techstars leaving Lagos?

Techstars’ decision to close the Lagos accelerator is part of a larger strategic shift, influenced by economic challenges and the need to streamline operations. In 2024, Techstars laid off 17% of its workforce and closed several other accelerator programs globally, including those in Austin, Toronto, and Seattle.

As part of a cost-cutting effort, the company is focusing on regions with higher concentrations of venture capital activity. This shift reflects Techstars’ adjustment to global economic conditions rather than any specific issues with the African startup ecosystem.

Though the Lagos program is ending, Techstars continues to support African startups through its global network. Founders and ventures from the Lagos program will still be part of Techstars’ portfolio, retaining access to resources, mentorship, and potential funding.

Techstars remains open to African founders joining other programs outside the continent, as some already have. Notably, a majority of the almost 100 African startups that have gone through Techstars programmes, have done so in programmes outside of Africa.

This shows that while Techstars is stepping back from Lagos, African founders can still benefit from its global ecosystem.

An opportunity for local accelerators

With Techstars’ exit, there’s a gap that local African accelerators can now fill. International programs like Y Combinator and Techstars have supported African startups, but largely from a distance. This departure raises an important question: should Africa continue relying on global accelerators, or is it time to invest in a stronger local support system?

Africa-led accelerators have unique advantages—they understand regional markets, know the local challenges, and navigate regulatory environments with ease.

Programs like Future Africa, MEST, DFS Lab, Injini, and Founders Factory Africa are already making strides, and now there’s even more potential for local players to step up and shape a startup ecosystem that meets Africa’s specific needs.

A robust, locally driven accelerator ecosystem could help African startups thrive, with support tailored to the continent’s dynamic and diverse market.

What Techstars exit means for African startups

While Techstars’ closure of the Lagos program might feel like a setback, it could also serve as a pivot point. By building a strong, self-sustaining startup ecosystem that combines local insights with global connections, African founders can establish a more resilient support system. Rather than relying solely on international players, the focus can shift toward building an ecosystem that’s made for Africa by Africa.

In the end, Techstars may be leaving Lagos, but it’s not leaving Africa. This shift underscores the need for local acceleration efforts, presenting a chance to create an ecosystem that empowers African startups on their own terms.

Source: Condia

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