Startup accelerator Techstars is reducing its workforce by 17% and shutting down its $80 million JP Morgan-backed Advancing Cities program.
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Launched in 2022, Advancing Cities was designed to invest in more than 400 companies led by Black, Hispanic and Latino, Native American and Pacific Islander communities in nine U.S. cities, including Oakland, New York and Miami.
However, the program will not continue once JP Morgan’s sponsorship ends at the end of the year.
According to TechCrunch, the bank decided against continuing the program last year, meaning Techstars couldn’t begin fundraising for a second round.
A spokesman for JP Morgan tells us TechCrunch: “The fund is expected to be fully deployed as planned by the end of this year. JPMorganChase remains committed to providing support across the country by expanding its diverse manager network, private investment platform and engagement capabilities.”
Earlier this year TechCrunch reported on tensions between the bank and Techstars over issues such as defining diversity in supporting founders.
Meanwhile, Techstars CEO David Cohen wrote in an email to employees last week confirmed cut staff by 17% and wrote: “It has become clear to me that we have built too much and hired too much to support our ambition to scale.”
The reductions come primarily from engineering, portfolio services and sales and partnerships. Accelerator teams remain largely unaffected – with the exception of Advancing Cities, which reportedly has around 20 people.