Australian start-ups could be set for a funding boost after leading US incubator TechStars revealed that it has raised a further $24 million in venture capital backing.
The incubator, which offers a 14-week accelerator program for promising tech ventures, raised the money from a selection of investors, including Foundry Group, IA Ventures, Avalon Ventures, DFJ Mercury and SoftBank Capital.
Crucially, the funding will significantly increase the seed funding offered by TechStars to the start-ups it backs.
Currently, TechStars offers $18,000 to start-ups, in return for a 6% equity stake. The new investment will allow it to offer $100,000 to businesses accepted into its program.
TechStars was founded in 2006 and has offices across the US. It estimates that around 70% of its start-ups go on to raise additional external funding.
The program backs around 60 businesses a year. That figure is set to increase following the decision to expand TechStars to markets outside the US.
So far, it’s thought that no Australian start-up has been backed by the venture, as yet. However, TechStars founder David Cohen has said that the program gets “lots of interest” from Australia.
Speaking about the latest funding deal, Cohen says: “It’s obviously a lot more attractive because it’s more money upfront as soon as you get into the program. I think it will also attract entrepreneurs at a different stage of their life.”