Techstars is laying off 17% of its staff, ending its JPMorgan-backed programs

Techstars is laying off 17% of its staff and will also end its $80 million JPMorgan-backed Advancing Cities program once the fund is fully used up later this year, TechCrunch has learned.

The Advancing Cities program, launched in 2022, has seen accelerator programs launched across the country in cities like Oakland, New York, Miami, and Washington DC, with the goal of supporting more diverse founders.

JPMorgan sponsored the program with a commitment until December, but the relationship between the bank and Techstars soured almost immediately, as TechCrunch previously reported. The bank was supposed to commit to continuing the program last summer so Techstars could begin fundraising for a second round with the hopes of deploying capital from the second round in 2025. But it did not commit by that earlier deadline. As of our previous report, the fate of about 20 Techstars employees who worked on the program was unclear.

“In 2022, JPMorgan announced the $80MM Advancing Cities Fund, raised as a private placement to invest in the Techstars accelerator program, which aims to promote equitable access to funding among diverse founders across the U.S.,” a JPMorgan spokesperson told TechCrunch. “As planned, the fund is expected to be fully leveraged by the end of this year. JPMorganChase is committed to supporting startups across the country through expanding its diverse manager network, private investment platform, and engagement capabilities.”

On Wednesday, it was reported by The Information that the program has been officially shut down.

In an email about the layoffs, Techstars co-founder and CEO David Cohen told employees that the startup accelerator had “overbuilt and hired more people.” He said most of the layoffs would come from those working on engineering, support services, and sales and partnerships. He promised that those running most of the accelerator programs would not be affected, with the exception of the JPMorgan programs, particularly the AdvancingCities program.

The news comes during a transformational year for Techstars. Techstars’ now-former CEO Maelle Gavet stepped down in May, with Cohen taking over the role once again after her departure. Wednesday’s layoffs follow a 7% workforce reduction in January, as TechCrunch previously reported.

Techstars’ strategy under Gavet was to expand into more programs and support more startups, but that was criticized by those in the investment community when the organization began reorganizing itself earlier this year. Cohen addressed those criticisms in an email sent to employees today, saying the firm will now “stop focusing on expansion and put all of our focus on being better for founders every day.”

Techstars declined to comment further, but pointed to Cohen’s email, which it published on its website.