PG: “Who needs this?”

But then why did he fund them?

This wasn't even the idea they applied with.

YC fund founders not ideas. He probably gave them a "warning" or a chance to give it a try expecting them to be ready for a pivot anytime soon. jm2c

My guess? The team was solid. Since they found something else (i.e., something better), they probably are.

Sometimes I put my team into a situation where they have to complete a really small product or tool "on their own". Usually when someone new is joining the team, so they learn the way of working together and how get over issues in that area.

Maybe this was the case here...

I was wondering the same thing, but PG must have thought someone needed this.

"Sadly, the team has moved onto another project."

Seems they recognized a better opportunity.