Startup accelerator Y Combinator decided to curb its late-stage investments to focus on early-stage opportunities and its accelerator program.
Due to the scaling back of its growth-stage practice, the company laid off 17 employees or nearly 20% of its workforce. CEO Garry Tan said that the firm was considering the strategic shift for a long time and has not been influenced by the implosion of SVB, which has impacted 30% of its portfolio startups.
Tan said that the focus on late-stage investing was a "distraction from our core mission."
- Y Combinator ventured into growth-stage investing with its $700M debut late-stage continuity fund in 2015 to make follow-on investments in promising portfolio startups.
- In 2017, it was reportedly raising a $1B second fund.
- Notable late-stage investments include DoorDash, Deel, Segment, Coinbase, Stripe, and Webflow.
- Anu Hariharan and Ali Rowghani, who led the growth-stage practice at the firm, are planning on leaving.
- Y Combinator has traditionally focused on early-stage startups emerging from its accelerator program, where it typically takes 7% equity stakes.
