Y Combinator narrows current cohort size by 40%, citing recession and funding conditions

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Y combinator He speaks he intentionally reduced the number of startups in his accelerator for the 2022 summer package. As first reported by The Information and independently validated by TechCrunch, the Y Combinator Summer 2022 cohort currently running boasts almost 250 companies, down 40% from the previous cohort of 414 companies.

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Y Combinator head of communications Lindsey Amos confirmed the cut in a text message, saying the party is still big “compared to parties over the past five years.”

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“The S22 batch is significantly smaller than our last batches. It was intentional,” the statement said. Amos said the economic downturn and changes in the venture capital environment have forced YC to cut back on the number of companies funded between W22 and S22. Many investors have argued that pre-seed and seed-stage startups, a world dominated by the YC accelerator has been immune to macroeconomic tensions due to how far this stage is from late-stage estimates. This latest YC move shows that such early-stage companies are not immune to the effects of the economic downturn.

In May, the accelerator advised its portfolio founders to “prepare for the worst.”

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“You can often gain significant market share during an economic downturn just by staying alive,” Y Combinator, a leading startup accelerator. wrote in an internal email to his founders this week. The advice was one of ten points in a memo designed to help companies navigate the economic landscape. crushing recession technology. Other standout quotes include: “No one can predict how bad the economy will be, but things don’t look good.”

Email was a change of mood from just a few weeks before, when hundreds of Y Combinator startups, many of which have already raised venture capital funding, presented themselves to the public at Demo Day. Startups were the first to receive the new standard $500,000 Y Combinator check and were actively focused on international opportunities. Now YC says “this slowdown will have a disproportionate impact on international companies,” among others.

Today’s confirmation ahead of the upcoming demo day in September shows how things have changed.

“We are constantly evaluating every aspect of our parties and the environment in which the companies will operate, and as a result the party size has always changed from season to season and year to year,” Amos continued in a text message.

It’s unclear if Y Combinator will continue to be more focused in future installments. In response to a question, Amos said that YC has just begun accepting applications for the next batch and will be evaluating “every aspect of our batch and the environment in which the companies will operate to determine the size of the batch.”

Over the years, the ever-increasing batch size of the Y Combinator has become a common, if not cliché, conversation among techies. Some say the bloated size of Y Combinator has weakened the members’ ability to stand out. Meanwhile, the institution last told tech blog Newcomer that one day she could launch 1,000 startups per batch. Amos said YC hasn’t cut spending because of the criticism or the cost of the rising check size.

This move will certainly help those in the current cohort stand out simply because of the lack of competition. This is another way that YC, albeit unintentionally, helps its startups improve their marketing. Several weeks ago, Y Combinator announced the launch of YCa platform where people can sort accelerator startups by industry, batch, and launch date to discover new products.

As I wrote at the time, Launch YC seems like a strategically sound Y Combinator answer to one of the loudest criticisms of his model in recent years: As the size of his group swelled, it became harder than ever to stand out in the group. Today’s news, depending on how you feel about it, could be another answer to questions about YC’s distribution efficiency.

Current members of the Y Combinator cohort can contact Natasha Mascarenhas via email at [email protected] or via Signal, a secure encrypted messaging app, on 925 271 0912.

Credit: techcrunch.com /

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