Welcome to Startups Weekly, a fresh, human take on this week’s startup news and trends. To receive this in your inbox, subscribe here.
In some ways, Y Combinator’s semi-annual demo day is somewhat predictable: there will be dropouts at Stanford, last-minute pivots, and, as always, promises of short-term profitability. We even made a bingo board about it.
But one thing I can never guess in advance is the exact priorities of the season’s batch. Y Combinator stands by the fact that it stands by people, not ideas, so its Demo Day technically reveals two things: who the accelerator bet on and what it decided to prioritize. This year was different for a myriad of reasons. First, YC Summer 2022 is the second batch to receive a check for $500,000 instead of $125,000, as part of the Accelerator’s expanded check size. Second, the batch was smaller than usual (see previous versions of this column here and here; it’s a completely different tone) – a narrowing in focus that the accelerator said was due to the slowdown. And finally, this was the first batch where we saw a fork; more than 60% of batch founders were in the Bay Area during the three-month accelerator, while others remained scattered around the world.
All of these tensions are great for story ideas. So this week, when covering the latest batch of YC, we decided to give readers a better understanding of the issues startups are prioritizing during the recession and how the upheaval of YC has impacted direction. of the company in certain domains and geographies compared to others.
I’m proud of how we performed despite all the iPhone news. We wrote about how YC fintech founders are getting back on the neobank bandwagon and crypto continues to be an area of optimism. We dug into the stars of artificial intelligence and the knockouts of the creator economy. And before I start to sound like a particularly cheesy rendition of Dr. Seuss, we looked at macro-scale geographic orientation and micro-scale retreat.
With that in mind, as per tradition, I want to leave you with a few takeaways I had after listening to hundreds of pitches. Here’s what 277 Combinator pitches taught me, and now maybe you, about startups:
- Ideas, then people or people then ideas: There are two camps of investing in startups, the check writers investing in disruptive ideas, and then the different groups of people trying to make those same ideas a reality; and check writers who invest in people and then support those same people in whatever disruptive idea they turn to. Y Combinator claims it’s more the latter than the former. But, the data says differently. Last batch, 29% were accepted with only one idea; this batch, 43% were accepted with only one idea. This means that over time, YC becomes more comfortable supporting founders with an idea; not necessarily less. Something to think about when looking at trends and how one of the best known accelerators thinks about breakdowns.
- It is a fintech accelerator, first: Oops, my bias shows. YC is looking more and more like a fintech and crypto accelerator than a consumer and biotech accelerator; you can tell based on the distribution of startups within each batch, but even from the format of Demo Day. It’s hard to tell a biotech or climate story with a single slide in a minute when the format actually helps a startup try to facilitate financial services.
- Moonshots go nowhere: One theory I had at the start of the lot is whether bigger checks, even in spite of a downturn, will cause bigger swings in the lot. We were not disappointed. Moonshots includes fake fish, alternative investments in athletes, and another ambitious game in the world of DTC healthcare.
In this week’s roundup, we’ll cover startup consolidation, Kim Kardashian, and the latest layoffs. Be sure to read the entire article as I slipped a TC+ discount code, especially for Startups Weekly readers, into the post.
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Startups, get busted
We’re not talking liquidity enough here, and I blame it in part on the fact that the M&A market has felt pretty dry over the past few months. Luckily, we have a few things to mention this week.
Amazon has bought Cloosertermans, a mechatronics specialist who will help it strengthen its robotic arm. TC’s Ingrid Lunden reports that the startup has “created technology to move and stack heavy pallets and bins, and robotics used to package products for customer orders.” Amazon’s attention isn’t new: Amazon has been a Cloostermans customer since 2019, but the acquisition makes things much more formal.
There’s also an acquisition of Instacart, which has been busy ahead of its impending public market debut. The grocery delivery company announced that it had acquired Rosie. This will expand the company’s footprint with local and independent retailers.
And, to end the week, we have online grocery company Misfits Market announcing that it will acquire Imperfect Foods. I love when Misfits and Imperfects come together.
Here’s why it’s important: More consolidation gives us much needed signals as to how the exit environment is doing these days. For early-stage startups, especially those struggling to raise another round, the future could look like becoming acquisition fodder (and that’s not bad news).
VC works hard, but Kim Kardashian works harder
Kim Kardashian announced this week that she was breaking into the world of private equity with SKKY Partners. His venture, done in conjunction with former Carlyle partner Jay Sammons, has yet to raise its first fund but expects to make its first investment by the end of the year.
Here’s what’s important: It’s the financialization of trendsetters, as we discussed on Equity. We’ve seen influencers enter into partnerships, start businesses, score equity in startups, but PE would be a different level — even for a Kardashian.
I’m experimenting with a new section in Startups Weekly, where each week we follow an old story or trend to see what’s changed since our first look. We haven’t talked about layoffs in a while here, so without further ado…
Here’s what’s new: Patreon has confirmed that it has terminated five employees from its security team. It will rely on external organizations to develop security capabilities. There are also tensions escaping from Aurora as Nigerian digital bank Kuda is the latest African startup to lay off employees.
Wait for it. Do you see it ? Yes, I’m excited too. And while we’re talking housekeeping, a few more notes:
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As a diver, I would gladly trust my life to the Apple Watch. Here’s why.
Outgoing Brex CRO explains decision to join Founders Fund
People are going back to the office – except in the Bay Area
Byju’s has no answers for its growing list of missing deadlines
YC Demo Day didn’t have a very long list of creator companies, but here’s who stood out
To thank you for subscribing to Startups Weekly, here’s a little TC+ discount for you: Enter “STARTUPS” at checkout for 15% off your subscription.
Seen on TechCrunch+
These are the 3 most important slides in your pitch deck
How the Upcoming Ethereum Merger Could Change Crypto Rewards, Costs, and Reputation
Let’s get into the weeds about fintech AUM
As startups stoke a tech frenzy in restaurants, is there anyone close to Toast?
Can you believe it was technically a short week? Cat Monday.