Techstars Decides to Close Cloud Accelerator in San Antonio

San Antonio—Techstars Cloud is closing its San Antonio accelerator program focused on cloud computing startups after four years in the Alamo City, according to managing director Blake Yeager.

Yeager is staying with Techstars but moving to the company’s headquarters in Boulder, CO, where he’ll work as vice president of engineering for the national chain of accelerators. He had been the managing director of Techstars Cloud since 2014.

Opened in 2012, Techstars Cloud was one of a few vertical, or sponsored, programs that the company runs across the country focused on an industry niche, such as cloud computing or healthcare startups. Cloud had a commitment to operate in San Antonio for four years, which it completed this year, Yeager says.

Since the last group of startups presented at a demo day in February, Techstars and the limited partners who invested in the cloud program—a group of local individual investors, including many former Rackspace employees—had deliberated on whether it should continue in San Antonio, Yeager says.

The answer was no.

“Are we going to add enough value to justify coming to a program in San Antonio versus one of our programs in Austin or New York or Seattle or Chicago, the other cities where we run horizontal programs?” he says. “We originally had investors and mentors that were interested in the cloud vertical. With cloud becoming a broad thing these days, it gets harder to identify those individuals and get them engaged with the program.”

The move is based the type of startup activity in San Antonio, says Michael Girdley, a co-founder of investment firm Geekdom Fund and an active member of the tech community.

“It feels pretty natural that the program would wind down eventually,” Girdley says. “The amount of startup activity in the cloud vertical is not what it was when Techstars opened here.”

Almost 80 miles north in Austin, Techstars will continue operating its accelerator program, which was launched in 2013 by Jason Seats. Seats also founded the cloud program in San Antonio in 2012 before leaving to start the Austin one—a move that led to a one-year hiatus for the cloud offering in 2014. Now Seats is a partner at Techstars Ventures and Amos Schwartzfarb runs the Austin accelerator.

The decision to leave was disappointing to the San Antonio tech community and himself personally, Yeager says, but he believes it is the right one. (The news was first reported by the San Antonio Business Journal.) Work is ongoing in San Antonio by local governments and advocacy groups, such as Tech Bloc and the 80/20 Foundation, to bring new tech companies and jobs to the city, including a tech-focused high school.

While the Techstars program brought great visibility to San Antonio, there’s plenty of other activity boosting the city’s tech scene, Girdley says. That includes things like the coding school he co-founded, Codeup (which is one of four), co-working spaces like Geekdom, and new tech-focused investments firms, such as Lew Moorman’s Scaleworks. Rackspace’s former Cloud Sites business, which sold to Liquid Web, has moved downtown and brought 400 people with it, Girdley says.

“Much of this other stuff happening is quietly making a relatively huge impact,” Girdley says.

David Holley is Xconomy's national correspondent based in Austin, TX. You can reach him at dholley@xconomy.com Follow @xconholley

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