Y Combinator removes Indian startup from batch over 'irregularities'

Storied venture firm Y Combinator has removed an Indian startup from its batch after discovering “irregularities” at the firm, several people familiar with the matter told TechCrunch.

Medobed, an Indian startup that promises medicine delivery in 10 minutes, was initially selected in Y Combinator’s S23 batch. In recent weeks, Y Combinator has severed its ties with the Indian firm and a partner at the venture firm has also suggested many prospective investors to not engage with Medobed, according to two people familiar with the matter and a copy of an email obtained by TechCrunch.

In the email, a YC group partner said the venture firm had “discovered irregularities” at the startup that broke the firm’s ethics policy, but did not elaborate.

“If you have anything outstanding with this company,” the YC partner wrote in the email, “our recommendation is to disengage completely with the company.” Medobed is no longer part of YC, “won’t do YC demo day, and, as far as we know, haven’t raised any money as part of this process,” wrote the partner.

YC and founders of Medobed didn’t respond to requests for comment on August 29. YC has also removed mentions of Medobed from its website.

An investor who had been separately pitched by Medobed said a founder’s claims had raised suspicions. The founder frequently altered his account of his educational history and the company’s growth metrics (“$1 million of monthly GMV and EBITDA profitability”) appeared inconsistent, said the investor, who requested anonymity to speak candidly. TechCrunch couldn’t independently verify the claims.

It’s very rare for Y Combinator, which selects a few hundred startups from tens of thousands of applications, to remove a firm from its coveted batch. India has emerged as a key market for YC in the past half decade.

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