Techstars, a prominent startup accelerator with a near two-decade history, has announced a significant increase in its standard investment for participating startups globally. This strategic enhancement aims to provide more substantial early-stage capital. However, the move coincides with a restructuring of the organisation’s presence in Africa, marked by the recent closure of its dedicated accelerator program in Lagos, Nigeria. This presents a nuanced picture for African founders seeking to access the Techstars network and its newly augmented funding.
Beginning with its fall 2025 cohorts, Techstars will invest a total of $220,000 in each accepted company, an increase of $100,000 from the previous standard offering. The investment is structured in two parts: a direct cash component of $20,000 in exchange for a 5% equity stake, and an additional $200,000 provided through an uncapped Simple Agreement for Future Equity (SAFE) note. This SAFE note includes a “most favored nation” clause, ensuring that Techstars’ conversion terms for this portion of the investment will be as favourable as those offered to subsequent investors in future funding rounds. The final equity percentage associated with the SAFE will therefore be determined by the company’s valuation at the time of a future priced round.
This revised investment model aligns Techstars more closely with the funding terms offered by other leading global accelerators, notably Y Combinator (YC). While YC’s total potential investment package has historically been higher ($125,000 for 7% equity plus a $375,000 SAFE), Techstars’ new terms offer a competitive alternative, particularly in the structure of the initial equity take and the uncapped nature of the larger SAFE component. The attractiveness of each program for a startup will depend on its specific capital needs and desired equity structure.
The decision to increase the global investment ticket size signals Techstars’ adaptation to the evolving venture capital landscape, where startups often require more significant initial funding to achieve critical milestones and attract follow-on investment. It underscores Techstars’ commitment to providing its portfolio companies with a stronger financial runway.
Recently, Techstars has undergone a strategic reassessment of its global footprint, impacting its operations in Africa. The ARM Labs Lagos Techstars Accelerator, a program that successfully ran for two cohorts in partnership with Lagos-based ARM Labs, concluded operations in late 2024. Launched in December 2022, this dedicated program had been a notable force in the African tech ecosystem, providing investment, mentorship, and network access to 24 startups from across the continent.
The closure of the Lagos accelerator is understood to be part of Techstars’ broader global restructuring efforts, which have also seen the winding down of other programs in various locations. While the partnership with ARM Labs concluded, Techstars’ stated rationale includes a focus on consolidating programs in areas with high concentrations of venture capital activity.
It is crucial to note that the closure of the dedicated Lagos program does not mean that African startups can no longer benefit from Techstars’ support or the new $220,000 investment. African founders remain eligible to apply to any of Techstars’ numerous accelerator programs hosted in cities around the world. Acceptance into one of these global cohorts would provide them with access to the increased funding and the full benefits of the Techstars network. The change signifies the end of a tailored, on-the-ground regional program, rather than a complete withdrawal from investing in African innovation.
Techstars has historically been a prolific early-stage investor in African startups through its various global and now-concluded regional programs. The restructuring alters the primary access point for African founders within the Techstars ecosystem, shifting it from a dedicated regional hub back towards the global pool of programs.
The increased global investment is a positive development for the startups that gain entry into Techstars. However, the closure of a dedicated program in a dynamic and growing market like Africa presents a new set of considerations for founders on the continent, who must now navigate the application process for globally competitive cohorts rather than a program specifically designed for their regional context.
Launch Base Africa reached out to Techstars for additional comments on these developments but is yet to receive a response.