Four out of the 10 early-stage technology companies joining Techstars Atlanta are from outside the United States, showing the city’s appeal among international startups looking into the American market as the worldwide accelerator program kicks off here.
Though 43 percent of the company applications came in from around the Southeast U.S., companies from 69 countries on six continents tried to pitch their way to Atlanta, according to Techstars.
Though Russia, United Kingdom and India were among the top source nations for applications, companies from only four countries — two from Israel (Joonko and Splitty) and one each from Canada (UCIC) and Belgium (Preesale) — ended up making the cut.
Techstars, a network of 27 accelerators around the world that runs startup competitions and provides mentorship and funding for member companies, will launch the three-week program in Atlanta this August with backing from Cox Enterprises Inc. in response to a particular impediment to growth in the city’s tech scene.
With its convenient air travel links, low cost of business, highly educated workforce and access to Fortune 500 companies for piloting new technologies, Cox leaders wondered: “Why is Atlanta not in that same category, if you will, as Austin and Boulder and Seattle and New York and Boston when we talk about the startup ecosystem?” says Michael Cohn, an Atlanta tech investor who sold his software startup, CloudSherpas, to Accenture last year.
The answer, Cox concluded after interviewing more than 100 of the city’s startup leaders, was that it lacked a “world-class accelerator program,” said Mr. Cohn, now managing director of Techstars Atlanta.
And to be world-class, you’ve got to open yourself to global competition, he said.
“To establish a vibrant tech community in our city means we have to look outside the boundaries of our city, so we were aiming to have a mix,” of applications, said Mr. Cohn, now managing director of Techstars Atlanta. “We wanted two or three from Atlanta, and the rest to come from outside the city, see what we have to offer as a city and perhaps at the end of the program chose to stay in the city.”
That ratio worked out as planned. Three of the 10 companies selected are from Atlanta — Real Meal Delivery, Sequr and LaaSer — while one is from Savannah: Bark. Two others — Drizzle and Fitspot — are from Los Angeles.
While Techstars promoted the program throughout its global network, Mr. Cohn and Techstars Atlanta director Tyler Scriven, who helped lead Silicon Valley software success story Palantir, did their own recruiting events in New York and Tel Aviv, Israel.
In the Israeli city, they pitched Atlanta to a packed crowd of more than 100 guests as a place where Israeli companies like Given Imaging and AmDocs have already been successful in growing their companies. Given, which makes diagnostic pill cameras, was sold for $860 million to Ireland’s Covidien.
“We went over there with a story that Atlanta is a great place to open up the U.S. market,” Mr. Cohn said. That message resonated, bringing in more than 35 applications from Israel alone.
Atlanta is also home to the American Israel Business Connector, or Conexx, a resource that helps promote ties between the South and Israel.
“For anybody coming to the United States from a foreign country, you on some level want to know that it’s a friendly place,” Mr. Cohn said.
The program will be heavy on mentorship, one of its not-so-secret weapons in distinguishing Techstars from the many other programs, said Mr. Cohn, who was previously a mentor.
The program will have a mix of mentors: active and “exited” entrepreneurs, business leaders and subject-matter experts. They’re not assigned to companies; founders have exposure to the mentors during a two-week “mentor madness” process that works like extended speed-dating. They pair up based on personality, preference and more.
He didn’t knock Georgia Tech’s Flashpoint or any other local programs, but he said the Techstars companies tend to be a bit further along in developing their product or service. And the program has a laser focus on helping them raise funds at the end of three months.
The nearly 800 Techstars companies globally have raised more than $2.4 billion in capital. More than 90 have been acquired, and 79 percent are still in business. Just 9.6 percent have failed, according to the company’s website.
Though it was launched independently, Techstars jibes well with the ChooseATL marketing campaign, which aims to position Atlanta as a tech hub and a magnet for millennials.
Mr. Scriven, who is now based here, says there’s real energy here and that the city’s reputation lacking a deep pool of venture capital is not as big of an issue now that funds are operating on a global basis.
“The city and the tech ecosystem have the right energy,” he said. “You have real entrepreneurs here and you have successful entrepreneurs that are reinvesting in the community. The backdrop to all of these is that increasingly investors in New York, San Francisco and elsewhere are beginning to look more anymore outside their communities for great companies to invest in.”
The program will be housed in 12,000 square feet of office space in Midtown‘s Ponce City Market development.
Learn more about the 10 companies here.