Start-up accelerator and Stripe backer more competitive than ever as acceptance rate falls below 1%

In addition to Stripe, the group has worked with global companies including AirBnB and Reddit, and has received 44,000 applications so far this year, its most ever

Garry Tan, chief executive and president of Y Combinator. Photographer: Pedro Fiúza/NurPhoto/Getty Images

The Silicon Valley start-up accelerator which largely supported the development of payments firm Stripe along other Irish businesses has become more competitive than ever in the past year amid a flood of big tech layoffs.

Founded in 2005, Y Combinator is widely considered one of the world's most renowned accelerators, with 6% of its start-ups now worth over $1bn.

In addition to Stripe, the group has also worked with global companies including AirBnB, Dropbox and Reddit, with its success seeing the business incubator receive 44,000 applications so far this year, its most ever.

Following its surge in popularity, the acceptance rate for its summer batch was less than 1%, the lowest in the organisation’s history, with president and chief executive, Garry Tan anticipating “little tech” will thrive even in a turbulent economy.

Patrick and John Collison, co-founders of Stripe

Speaking in a recent interview, the CEO added that cuts at big tech companies have unshackled people to work on important, new companies.

“The amount of talent that was locked up in cushy jobs,” Mr Tan said, “I’m hoping a lot of them actually come over to startups, and they realize, oh, this is what it’s like to run fast again.”

However, a flood of layoffs has also hit the accelerator itself in the run-up to its busiest year, with Y Combinator announcing in March it was cutting its workforce by 20% and migrating away from late-stage investing.

Announcing the news just one week after the collapse of Silicon Valley Bank which left more than 30% of Y Combinator's companies exposed and unable to cover payroll, the firm's switch to solely early investing resulted in 17 jobs being cut, roughly a fifth of the company's overall headcount.

Mr Tan stepped into the top job at Y Combinator in January of this year, succeeding co-founder Paul Graham and Sam Altman, who went on to help start OpenAI. 

Mr Tan himself was accepted to the incubator as a founder in 2008, the same year Mark Zuckerberg attended the accelerator’s regular “demo day” where Jeff Bezos announced Amazon Web Services.

In addition to Stripe, the accelerator has also provided funding and mentorship to Limerick-founded firm, Protex AI, whose co-founders Ciarán O'Mara and Dan Hobbs were listed in the Forbes 30 under 30 list earlier this year for their achievements in the technology sector.

Protex AI co-founders, Ciarán O'Mara and Dan Hobbes

Several other Y Combinator-backed Irish companies include Milk Video, Inscribe AI, Noloco, Artillery.io, Sienna, LiveFlow, Klir, and Luminate Medical.

Entry to Y Combinator is highly sought after, with startups around the world looking not just for the $500,000 investment but also for one of the most prestigious networks in tech. Other companies seeded by Y Combinator include Airbnb, Coinbase, Dropbox, Instacart and Reddit.

- Additional reporting from Bloomberg