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Y Combinator reduces its startup batch size by 40%  

As venture capital funding dried up due to the global economic slowdown, Silicon Valley-based startup accelerator Y Combinator reportedly reduced its summer startup batch by 40%.

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% 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. 

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”. 

A recession that is approaching and a funds shortage will only make the situation worse. 

Numerous major venture capital firms, including Sequoia Capital, Lightspeed Venture Partners, Craft Ventures, and Y Combinator, have sent memos and footnotes to their portfolio companies and startups with advice on how to survive the current crisis. 

The worst has yet to come for the tech sector, which has experienced a large stock sell-off, as more than 32,000 tech professionals were laid off in the US up to July of this year, including at Big Tech companies like Microsoft and Meta (previously Facebook).

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BRL Editor
BRL Editor
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