By Elsa María Granados
YCombinator has been probably the most prominent start-up accelerator in the world for the last two decades. And, to top it off, on January 10, 2022, the firm announced a new update to its standard deal for investing in start-ups. YC jumped from $125,000 to $500,000, quadrupling its investment amount. This way YC aims to secure its leading title, positioning itself as the unbeatable start-up accelerator.
Which is YC’s philosophy and mission?
YCombinator aims to be, in its own words, “the preferred source of seed funding for start-ups.” So, they accompany their investees through the first phase of the journey, helping founders not only with money but specially in building real businesses out of what might just be extraordinary ideas. This is the most important part of YC’s support: the firm works along with founders to create extraordinary businesses, which can scale and raise money at a different level.
Tech startups can partner with YC when they just have a business idea or when they are already a consolidated company with high amounts of annual revenue and a considerable number of employees.
YC funds companies from anywhere in the world and regardless of the sector.
YC’s strategy
Twice a year, YC invests $500,000 per company in a large number of start-ups, in return for small stakes in these companies. The Accelerator funds companies through the YC programme, which lasts for three months (from January through March or from June through August, depending on the batch you apply for).
Here is their specific strategy. The YC standard deal works as follows:
They invest $500K on 2 separate safes:
• They invest $125,000 on a post-money safe in return for 7% of your company (the “$125k safe”)
• They invest $375,000 on an uncapped safe with a Most Favored Nation (“MFN”) provision (the “MFN safe”)
YCombinator’s successful stories
Since 2005, YC has invested in over 3,000 companies. Now, all these companies combined are worth more than $400B.
Two of the most successful companies they’ve invested in are well known to everyone:
Airbnb, founded in 2008 and based in San Francisco, California, is a company that provides a digital platform for renting unique accommodations across the world. Present in over 33,000 cities and 192 countries, it permits owners to monetize their extra space while making unlimited places and experiences possible for travellers. Airbnb has raised a total of $6B in funding over 31 rounds. Its market capitalisation is 96.26B USD.
Dropbox, founded in 2007 and based in San Francisco, California, is a smart workspace company. It provides secure file sharing, collaboration and storage solutions. Dropbox brings together everything in just one place: traditional files, cloud content, and web shortcuts, allowing you to save files and access them from any device, and also share them with anyone. Dropbox has raised a total of $1.7B in funding over 11 rounds. The market capitalisation of this company is 8.66B USD.
YCombinator is also attracting the best European startups
Recently, YC has announced its latest intake of promising start-ups. The following are the European start-ups (grouped by sector) that made it into YC’s latest programme bach and that will be presented in the YC’s Winter 2022 Demo Day, which will be held on March 29th and March 30th, 2022:
B2B: iomete, Speechly, Flagright, CUTR.
Biotech: Phase Biolabs.
Cybersecurity: Sarus.
Ecommerce: GAVEL.
Fintech: Joe, Pluto Markets.
Food: yhangry.
Healthtech: Whitelab Genomics, Oto, Syrona Health, ITCHY.
HR tech: Quan, Bemlo, Tahora, NudgeLabs.
SaaS: AiSupervision, Brainboard, Trackingplan, Subscriptionflow, Supersheets, Cerebrium.
Sustainability: Pina Earth, Glocally, SmartHelio, Aklimate, Seabound.
Transportation: Beyond Aero.
