Y Combinator has shrunk the number of startup in it's summer program. More than 200 companies are currently in action, down 40% from the previous cohort, which landed 409 companies.
The reduction over text message was confirmed by Lindsay Amos, the head of communications at Y Combinator.
Our most recent batches were larger than the S22 batches. This was planned. The number of companies funded between W22 and S22 was reduced due to the economic downturn. Pre-seed and seed-stage companies have been immune to macroeconomic tensions because they are removed from late-stage valuations. It shows that early-stage companies are not immune to the effects of the downturn.
The founders were told to plan for the worst.
In an internal e-mail to its founders this week, Y Combinator said that it can pick up significant market share in an economic downturn. No one can predict how bad the economy will get, but things don't look good.
YC advises founders to ‘plan for the worst’ amid market teardown
The vibe of the email was different than it was just a few weeks prior, when hundreds of Y Combinator startup presented themselves to the public on demo day. There will be a disproportionate impact on international companies.
Things have changed ahead of the upcoming demo day.
Amos said that the batches have always varied from season to season and year to year.
Y Combinator may operate in a more focused capacity in the future. Amos said that YC just started accepting applications for the next batches and will evaluate the environment in which the companies will operate to determine the size of the batches.
Techies talk a lot about Y Combinator's ever-growing batches. The ability for participants to stand out has been diminished by Y Combinator. Amos said that YC did not scale back because of criticisms or the cost of its check size.
Due to lack of competition, those in the current cohort will benefit from the move. It is one of the ways YC is helping its startup get better marketing. Launching YC is a platform where people can sort startup by industry and launch date.
As I wrote at the time, Launch YC feels like Y Combinator's answer to one of the loudest criticisms of its model in recent years, as its cohort size has bloated. Depending on how you view it, today's news could be a response to questions about distribution efficacy.
Natasha Mascarenhas can be reached by e-mail at natasha.m@techcrunch.com or by using the secure messaging app Signal.
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