YC received an astonishing 24,000 applications for the Summer 2023 batch, from which they chose to fund 229 startups. Notably, YC opted to support very early-stage companies, with 75 per cent of the selected startups entering the program without generating any revenue on day one.
Furthermore, a remarkable 81 per cent of these startups had never raised any external funding before joining YC.
AI Dominates the Selections
Garry Tan emphasised in a blog post the growing significance of artificial intelligence (AI) in the startup ecosystem. He pointed out that AI played a significant role in the selection process, stating, “You’ll notice AI has a big presence in the S23 class — this is no accident. Recent developments in AI have unlocked an entire universe of possibilities, presenting a resoundingly clear answer to the question of ‘Why now?’.”
Diverse Verticals Represented
While B2B Software-as-a-Service (SaaS) dominated the batch, accounting for 70 per cent of the selected startups, other key verticals included fintech (10 per cent), healthcare (10 per cent), consumer (6 per cent), and proptech/industrials (4 per cent).
In terms of demographics, YC highlighted its commitment to diversity among its selected startups. Among the batch, 16 per cent have Asian founders, 12 per cent are of South Asian origin, 2 per cent are Black, 3 per cent are Hispanic or Latinx, 3 per cent are Middle Eastern or North African, 6 per cent are multiracial, and 29 per cent have White founders. Additionally, 15 per cent of the companies have a woman founder, with 10 per cent of the founders being women.
Garry Tan also provided guidance for prospective investors looking to engage with YC startups. He encouraged investors to make quick decisions, act like long-term owners, and offer meaningful assistance to the startups they choose to invest in. Importantly, he urged investors not to harm startups if they have no intention of investing, emphasising the importance of a supportive ecosystem.
YC’s Expanding Influence in India
Y Combinator has been a significant investor in Indian startups, with a growing portfolio of firms, including Razorpay, Zepto, Meesho, Groww, among others. Last year, Indian startups held a prominent position in YC’s top companies list, with 10 Indian companies, including Meesho, Clear, Groww, and Khatabook, making the list.