Y Combinator to reduce late-stage investments and cut 20% of staff
- ByStartupStory | March 14, 2023
Y Combinator, the US-based accelerator renowned for its support of early-stage startups, has announced plans to scale back its late-stage investments, citing a shift in focus towards its core mission. In a blog post, Y Combinator’s President and CEO, Garry Tan, explained that the move is aimed at reducing distractions.
Y Combinator has engaged in late-stage investing in the past few years, but according to a recent blog post by CEO Garry Tan, “the company has decided to reduce its involvement in this area. Tan explained that late-stage investing differs significantly from early-stage investing and has proved to be a distraction from the company’s primary mission”.
As a result of the decision to decrease late-stage investing, Y Combinator will no longer require certain positions within its late-stage investing team. In a blog post, CEO Garry Tan stated that “17 team members will be impacted by this change in strategy. Tan also expressed gratitude for their significant contributions to the company”.
Despite recent news of Silicon Valley Bank’s (SVB) troubles, Y Combinator has clarified that its decision to reduce late-stage investing was planned prior to the bank’s downfall. The accelerator informed that over 30% of its startups have exposure to SVB, but did not provide details on how the bank’s situation would impact them.
According to the blog post, Y Combinator’s decision to decrease late-stage investing is not expected to have any significant impact on the startups it funds or how it interacts with alumni.
Groww, Zepto, Razorpay, and Khatabook are among the Indian startups that have received late-stage funding from YC Continuity, the growth-stage investment fund of Y Combinator, according to sources.
Anu Hariharan and Ali Rowghani, who served as partners leading YC Continuity, have reportedly decided to depart from the firm and establish a new fund together.
Since its launch in March 2005, Y Combinator has provided investment to more than 4,000 companies, such as Airbnb, Coinbase, Cruise, DoorDash, Dropbox, Instacart, Quora, PagerDuty, Reddit, Stripe, and Twitch. As of January 2023, the top YC companies had a combined valuation of over $600 billion.
Y Combinator conducts interviews and selects two cohorts of startups annually, providing them with a combined sum of $500,000 in seed funding, as well as advice and networking opportunities.
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