We do have a policy on this. The short version is that we will fund competitors of companies we have funded in the past, so if that describes you, please don't be dissuaded from applying.
From our FAQ:
Will you fund multiple startups working on the same idea?
Yes. If you fund as many companies as we do it's unavoidable you'll end up with some overlap. Even if you tried not to accept competing companies, you'd still get overlap because startups' ideas morph so much. The way we deal with it is that when two startups are working on related stuff, we don't talk to one about what the other's doing.
In practice it has not turned out to be a problem, because most big markets have room for several slightly different solutions, and it's unlikely that two startups would do precisely the same thing.
From our FAQ: Will you fund multiple startups working on the same idea?
Yes. If you fund as many companies as we do it's unavoidable you'll end up with some overlap. Even if you tried not to accept competing companies, you'd still get overlap because startups' ideas morph so much. The way we deal with it is that when two startups are working on related stuff, we don't talk to one about what the other's doing.
In practice it has not turned out to be a problem, because most big markets have room for several slightly different solutions, and it's unlikely that two startups would do precisely the same thing.