Qualcomm Ends Techstars Robotics Accelerator, Looks for Alternatives
[Updated 11/2/15 1:20 pm. See last three paragraphs below.] Qualcomm (NASDAQ: QCOM) has ended its partnership with Techstars, less than two months after graduating the inaugural class of 10 startups from the Qualcomm Robotics Accelerator, powered by Techstars. The San Diego wireless giant had indicated the program would continue for three years.
The decision to terminate the robotics accelerator was confirmed today by Qualcomm CTO Matt Grob, who said the intense, four-month mentoring program was successful. But he indicated it was difficult for the wireless technology giant to justify the costs when the company was experiencing hard times.
Qualcomm and Techstars announced the formation of the robotics accelerator just over a year ago. The San Diego-based company began to lay off employees in September, after revealing plans to cut its global workforce of 31,300 by 15 percent over the next year. Qualcomm has said it intends to trim expenses by $1.4 billion a year.
In addition to providing a $100,000 loan to each of the 10 companies admitted to the robotics accelerator, Qualcomm paid Techstars to manage the program, and renovated a 7,000-square-foot collaborative space for the accelerator in a building at Qualcomm headquarters.
“I would say the overall effort was successful,” Grob said during a break today at an all-day conference on contextual robotics at UC San Diego, where he was a morning speaker. The robotics accelerator was successful enough for Qualcomm to look at other ways of underwriting incubator-type programs in the future, he said.
For Qualcomm, Grob added, “It was a question of whether we’ll continue with Techstars.”
In response to a query from Xconomy, a statement issued by Qualcomm says: “After careful consideration, Qualcomm has determined that the best course of action for the Company, our shareholders and our customers is to not move forward with Techstars while we look into future robotics initiatives. We still value Techstars and thank them for their many contributions.”
The statement added, “Members of this year’s accelerator program will continue to receive support and mentorship from Qualcomm and Techstars alike.”
In Boulder, CO, where Techstars is based, managed partner David Brown also sent a statement by e-mail, saying, “Techstars and Qualcomm have made the mutual decision not to continue with a second class of the Qualcomm Robotics Accelerator, powered by Techstars. The first class was incredibly successful and Techstars will continue to support these 10 portfolio companies as we support all Techstars companies post-program. They will remain active participants in the Techstars ecosystem and we will do whatever we can to ensure their continued success.”
Referring to Techstars’ three-person staff in San Diego, Grob said, “The whole team worked very hard. It turned out to be a lot of work, maybe more than anyone expected.”
“I just reviewed the status of all 10 companies, and wow, we had a successful program,” Grob said, noting that three or four companies were expecting to close on new outside funding since Demo Day on Sept. 10. Qualcomm is still engaged with all 10 companies, and he said, “we’re trying to find ways to go forward with several of them.”
[Updated 11/2/15 1:25 pm.] An overview of Techstars programs on the Techstars website shows total funding for graduates of the Qualcomm Robotics Accelerator at over $1.8 million—among the five lowest funding outcomes of the 61 programs that Techstars has managed since 2007.
All five of those programs, however, were conducted this year, so the startups raising capital haven’t yet had time to accumulate as much total funding as those that participated in Techstars programs held years ago.
The overview shows that 658 companies have participated in 61 Techstars programs so far—and attracted total funding of more than $1.9 billion. Average funding per company works out to over $2.9 million, and average funding per program amounts to more than $31.7 million.