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Silicon Valley Startup Accelerator Y Combinator to Minimize Late Stage Investing, Lays Off Employees

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Y combinator

American technology startup accelerator Y combinator has announced plans to scale down on late-stage investments as it reveals plans to realign its priorities to focus more on early-stage investments. This will necessitate laying off some members of their workforce.

The company’s President Gary Tan, via a blog post, disclosed that the decision was taken after it found late investing to be a distraction from its core mission.

In his words, “YC is rightly known for early-stage investing. In recent years, we have also done some late-stage investing. But the last stage of investing turned out to be so different from the early stage that we found it to be a distraction from our core mission.

“So, we are 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. Seventeen of our teammates are impacted today. As we make this change in strategy, we want to acknowledge and express our appreciation for their substantial contributions. “There shouldn’t be any noticeable effect on the companies we have funded or on the way we interact with alumni”.

The company however disclosed that the layoffs were planned before the collapse of Silicon Valley Bank and are not in any way connected to the recent implosion of the bank.

Investors King understands that Y Combinator had submitted a petition to US Treasury Secretary Janet Yellen seeking relief and attention to an immediate critical impact on small businesses, start-ups, and their employees who are depositors at the Silicon Valley Bank, after the collapse.

Y combinator’s recent decision to scale down on late-stage investing comes during a sharp pullback in venture funding, particularly for late-stage companies, in which investors have been reluctant to write big checks for start-ups after the value of comparable public tech companies has fallen.

Late-stage deals dropped 80 percent in terms of volume and 88 percent in terms of value in February 2023. Series B startups raised only $459 million across 11 deals in February 2023, a decline from $3.84 billion across 56 deals in the same period of 2022.

Y Combinator is a place where early founders can create something from nothing and join one of the world’s best founder communities. For more than 15 years, the firm has provided seed money for start-ups, which has made it possible for a whole bunch of companies to reach their full potential.

With 125 worth more than $150m and a combined alumni value exceeding $300billion, companies such as Airbnb, DoorDash, Stripe, Cruise, Dropbox, Coinbase, Reddit, and Gitlab are just a few companies that used Y-combinator as the accelerator and seed money source they needed to take off. Since 2005, the company has funded over 3,500 startups and has a community of over 9,000 founders.

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Huawei Records Decline in Profits For 2022 as US Sanctions, China’s Pandemic Impacts Earnings

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Chinese leading global provider of information and communications technology (ICT) infrastructure and smart devices Huawei has reported a decline in profit for 2022, attributing the decline to US sanctions and China’s pandemic controls.

The tech giant company recorded a net profit of 35.6 billion yuan ($5.18 billion), a 69% year-on-year decline, which is reported to be the company’s biggest annual decline since 2011.

Huawei which is one of China’s first global tech brands was caught up in China-U.S. tensions over technology and security. This prompted U.S. officials to disclose that the company is a security risk and might enable Chinese spying.

The U.S., therefore, banned U.S. companies from doing business with Huawei, cutting off its access to chips and software such as Google services for its smartphones, also preventing it from selling its telecommunications gear to U.S. customers.

This move by the U.S. affected Huawei’s smartphone business which was once the number one in the world. Huawei’s consumer business which houses its smartphone unit, fell more than 11% to 214.5 billion yuan in 2022, a significant decline from 2021. However, the company recorded a huge profit after it sold off its Honor brand to a consortium of over 30 agents and dealers to keep its budget smartphone unit alive.

Speaking on the business operations for the year 2022, Huawei’s chief financial officer Sabrina Meng said, “The year 2022 is a year where Huawei pulled ourselves out of a crisis mode. U.S. restrictions are now our new normal and we’re back to business as usual.”

Also commenting is the rotating Chairman at Huawei Eric Xu who said, “In 2022, a challenging external environment and non-market factors continued to take a toll a Huawei’s operations. In the midst of this storm, we kept racing ahead, doing everything in our power to maintain business continuity and serve our customers”.

Investors King understands that Huawei has since sought to diversify its business into new areas such as cloud computing and automotive after a few years following U.S. sanctions that took a toll on the company’s revenue. For now, these businesses seem to have paid off as Huawei’s enterprise business revenues in 2022 grew 30% from a year earlier to 133.2 billion yuan ($19.4 billion). 

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Google Removes 5.2 Billion Ads, Over 4.3 Million Ads Restricted for Violating its Policies

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A logo is pictured at Google's European Engineering Center in Zurich

Giant tech company Google in its Ads Safety Report 2022 revealed it removed 5.2 billion ads, restricted over 4.3 million ads, and suspended over 6.7 million advertiser accounts in 2022 for violating its ads policies.

The company also stated that it has blocked and restricted ads from serving over 1.57 billion publisher pages across over 1,43,000 publisher sites compared to 63,000 in 2021.

Reports reveal that the 5.2 billion ads that were removed violated Google’s policy which includes misleading financial ads, dangerous products, and services, trademark violations, counterfeit goods, sensitive events about the Russian-Ukraine war, etc.

On the other hand, the over 4.3 million ads contained unacceptable content such as copyrights, alcohol, financial services, healthcare and medicines, adult content, gambling, local legal requirements, and restricted businesses.

Speaking on the report, Google Ads safety and privacy director Alejandro Borgia said, “Bad actors use online advertising to cause harm. We are committed to keeping you safe online by building products that are secure by default, private by design and put you in control. This promise extends to your online ad experience, which is why we are committed to blocking or removing bad advertisements.

“To create safe ads for users, we have updated 29 advertiser and publisher policies. This policy creation cycle is continuous and as we detect new issues that are emerging on the internet, we are constantly refining our policies and creating new policies when necessary. We will continue to invest in policies our team experts and enforcement technology to stay ahead of potential threats”.

Investors King understands that Google is also rolling out an Ads transparency center or a searchable hub for all ads from verified advertisers where users can see what they have run on the platform, the formats, and more.

It is interesting to note that there have been incessant complaints from users stating that Google’s search results are increasingly stuffed with paid ads, and they expressed concerns that spam sites are getting better at pushing themselves up in search results by gaming the company’s algorithms. Users disclosed that using the site was becoming less helpful and more annoying even as it remains the primary tool more than 4 billion people use to search the internet.

Looking ahead into 2023, with the first quarter (Q1) almost over, Google has revealed that it is committed to providing a safe and trustworthy ads experiment for users, which it disclosed is the company’s critical mission to organize the world’s information and make it universally accessible and useful. The giant tech company further promises to stay diligent in its efforts to combat abuse across its platform while helping advertisers and publishers grow their businesses.

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Nigeria’s EFCC Arrests Olumide “D.O” Olusanya, Founder of Kloud Commerce

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EFCC

Nigeria’s Economic and Financial Crimes Commission (EFCC) has taken Dr. Olumide “D.O” Olusanya, the founder of Kloud Commerce, into custody, according to sources.

The EFCC officers reportedly detained Olusanya on Monday while he was in the middle of a meeting at the Lekki offices of Gloopro, one of the business ventures he led. Olusanya’s previous startup, Gloo.ng, was also shut down.

Investors have alleged malfeasance and deceptive practices by Olusanya, who they claim provided false updates on the growth of Kloud Commerce. At least 18 institutional and individual investors had provided capital to the now-shuttered startup.

Former executives and employees who worked with Olusanya at Kloud Commerce had described him as an abrasive founder who presented a positive picture to investors despite scarce progress while continuously demotivating the team he had assembled.

Kloud Commerce had raised USD 765 K in pre-seed funding in 2021 to develop a multi-channel commerce solution for African businesses, starting in Nigeria. However, the startup closed its doors a year later after a prolonged period of questionable management and disputes that left the company crippled for several months.

At the time of publishing this report, Olusanya remains detained, and further clarification on the matter is still pending.

The situation serves as a reminder of the importance of transparency and accountability in the startup ecosystem, where trust and credibility are vital factors for attracting investors and customers.

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