Silicon Valley start-up accelerator, Y Combinator will slash around 20% of its workforce as the firm takes steps to decrease its amount of late-stage investing.
Widely considered one of the world’s most renowned accelerators with 6% of its start-ups now worth over $1bn, Y Combinator has worked with global companies including AirBnB, Dropbox and Reddit, having also provided funding and mentorship to several Irish businesses including Stripe.
In a memo published this week, President and CEO, Garry Tan announced that as late-stage investing was so different from early-stage investing, late-stage activity became a “distraction from our core mission.”
“We’re going to decrease the amount of late-stage investing we do. Unfortunately, this means we will no longer need some of the roles on the late-stage investing team.”
The firm’s switch to solely early investing will result in 17 jobs being cut, roughly a fifth of the company’s overall headcount.
The accelerator has funded several Irish businesses since its establishment in 2005, including Stripe, which is widely considered one of Y Combinators’ greatest success stories. Partnering in the summer of 2009, the Limerick-founded firm is now listed as the group’s number-one private company.
The Silicon Valley investors have also provided funding to fellow Limerick-founded firm, Protex AI, whose co-founders Ciarán O’Mara and Dan Hobbs were last week listed in the Forbes 30 under 30 list for their achievements in the technology sector.
Several other Y Combinator-backed Irish companies include Milk Video, Inscribe AI, Noloco, Artillery.io, Sienna, LiveFlow, Klir, and Luminate Medical.
Y Combinator’s downsizing comes less than a week after the collapse of Silicon Valley Bank, a bank that was largely focused on technology start-ups.
Despite the accelerator telling TechCrunch that its restructuring was not influenced by SVB’s collapse, roughly 30% of the companies Y Combinator funds are exposed to the bank, with Mr Tan calling the collapse an “extinction-level event for startups.”
Posting to Twitter, Mr Tan revealed, “30 per cent of YC companies exposed through SVB can’t make payroll in the next 30 days.”
“All little startups, tomorrow’s Google’s and Facebook’s, will be extinguished if we don’t find a fix.”