Y Combinator Cuts Startup Batch Size By 40 Percent Amid Economic Downturn


Silicon Valley-based startup accelerator Y Combinator has reportedly slashed its summer startup nurtruring batch by 40 per cent as venture capital money disappeared amid the global economic slowdown. According to The Information, Y Combinator has “cut the number of startups it is funding and training this summer by about half compared to its winter programme”.

The Y Combinator’s Summer 2022 cohort now has nearly 250 companies, down 40 per cent from the previous class which had 414 startups. “The downsizing also follows mounting criticism that Y Combinator had grown too large, damaging its reputation for churning out Silicon Valley’s best startups,” the report said late on Tuesday.

However, according to Y Combinator, the summer 2022 batch is still large “relative to the last five years of batches.” Y Combinator’s head of communications, Lindsay Amos, confirmed the reduction over text message, saying that the batch is still large “relative to the last five years of batches.”

“The S22 batch is significantly smaller than our most recent batches. This was intentional,” according to the company. In May, the accelerator had advised its portfolio founders to “plan for the worst.” In an internal email to its founders, the company stated that “you can often pick up significant market share in an economic downturn by just staying alive”.

The situation is set to get worse with recession looming and funding drying up. Several large investment firms like Sequoia Capital, Lightspeed Venture Partners, Craft Ventures, and Y Combinator etc have sent memos and footnotes to their portfolio companies and startups on how to endure the ongoing crisis.

More than 32,000 tech workers have been laid off in the US till July this year, including at Big Tech companies like Microsoft and Meta (formerly Facebook) and the worst has not been over yet for the tech sector that has seen massive stock sell-off.


Categories: Uncategorized

Tags: , , , , , , ,

Leave a ReplyCancel reply