Two years after launching an ambitious accelerator program in Nigeria, ARM Labs Lagos Techstars (Techstars Lagos) has shut down, halting plans for its third cohort, which had begun in early 2024. This program closure, which surprised local founders and stakeholders, reflects a larger re-evaluation of resources and focus by Techstars, a global venture capital powerhouse. Confirming the decision, Techstars’ Chief Brand and Communications Officer, Matthew Grossman, explained, “Techstars’ partnership with ARM Labs has ended, and we will not proceed with a third ARM Labs Lagos Techstars Accelerator Program. The first two cohorts featured outstanding companies and founders, supported by a dedicated group of mentors.”
The Nigerian startup ecosystem welcomed Techstars in December 2022, when it partnered with ARM Labs, a local venture and innovation company, to launch the ARM Labs Lagos Techstars Accelerator Program. This three-month program aimed to provide up to $120,000 in funding for early-stage startups in Nigeria, ultimately adding 24 Nigerian startups to the Techstars portfolio. Among these were notable names like GetEquity, Jump n Pass, Oystr Finance, and Keza Africa, companies that received both capital and access to Techstars’ expansive global network.
Local Impact and Future Support for Techstars Portfolio Startups
Despite the shutdown, the 24 startups supported through Techstars Lagos will retain their status as Techstars portfolio companies. This affiliation provides them continued access to the global Techstars network, which includes over 4,500 companies and extensive resources to foster growth and innovation. “We remain optimistic about collaborating with the local startup community to maintain our presence in this vibrant innovation hub,” Grossman added.
In addition, Techstars’ Managing Director for the ARM Labs Lagos program, Oyin Solebo, and Program Manager Oluwadunni Fanibe, who has since moved to Google as a Mentor, expressed support for the burgeoning Nigerian tech ecosystem. Solebo’s farewell letter on September 20, 2024, reiterated her dedication to Africa’s venture ecosystem, a commitment that highlights the broader support Nigerian startups continue to receive from alumni mentors and investors despite the program’s end.
Investment Impact and a Shifting Accelerator Landscape in Africa
By the program’s close, Techstars Lagos had infused approximately $2.4 million into Nigeria’s startup scene, marking significant, albeit short-lived, financial support. This retreat comes amid increased global focus on regulatory compliance, economic headwinds, and shifting funding priorities, which have affected accelerator programs worldwide. In particular, fintech hubs and digital service providers across Africa face pressures from fluctuating market conditions and currency risks, factors which could have influenced Techstars’ decision to shift focus.
Broader Industry Perspectives
According to TechCabal and Disrupt Africa, Techstars’ closure of the Lagos-based program reflects an ongoing recalibration within Africa’s venture capital landscape. While the global accelerator continues to maintain a presence in other regions, its exit from Lagos raises questions about support structures for early-stage African startups. Similar programs in Africa may need to adapt by emphasizing sustainable funding models and potentially collaborating with local organizations to weather future economic challenges.
The end of ARM Labs Lagos Techstars marks a significant shift, but its legacy could stimulate new, locally-driven initiatives focused on fostering African innovation within Nigeria’s dynamic tech ecosystem.