Y Combinator has reduced the number of startups that it finances and trains by 40%

Y Combinator this summer reduced the number of startups it funds and trains by almost half compared to the winter program. This was announced on August 3 by the head of the accelerator's communications department, Lindsay Amos, writes TechCrunch.

Most importantly, Y Combinator has reduced the number of startups that are funded and trained by it by 40%. Therefore, almost 250 companies will present themselves to potential investors in early September during the virtual Demo day, while 414 startups announced themselves during the last such event.The accelerator took this step due to the downturn in the economy and venture financing.Despite the negative indicators in the economic market, such a decision can play into the hands of startup founders who still have the opportunity to express themselves. Fewer competitors will allow them to stand out — this chance was not enough for representatives of previous groups of startups. Details

Many investors argue that startups in the pre-seed and seed stages, which are mostly supported by Y Combinator, are immune to macroeconomic stress due to how far these stages are from being evaluated in the later stages. Such a move by the accelerator underscores that companies in the early stages are not immune to economic problems.

Back in May, the accelerator advised startup founders from its portfolio to "prepare for the worst." "You can often gain significant market share during an economic downturn just by staying afloat," Y Combinator wrote to the company's founders this week. He also noted that"no one can predict how bad the state of the economy will be, but things don't look very good right now."

A huge number of startups in Y Combinator are often called "bloated" and criticized for this. Experts believe that this makes it difficult for companies to stand out from each other. Although representatives of the accelerator said that one day they will be able to launch a thousand startups in one group.