In 2018, Y Combinator released its first mega list of the top companies valued at $150 million or more that have gone through the accelerator.
Over the past four years, it’s updated the list to reflect the current status of its most valued companies. Valuation isn’t the best way to measure a startup’s success or real-life value, of course, and YC has always admitted that. Yet, as the accelerator points out, “it’s the most commonly available metric to compare companies in the startup world.”
Thus, the original list of 101 companies has ballooned to 267 companies as of February 2022 (YC list isn’t exhaustive; some founders opt out of being listed).
Many factors are responsible for this growth. One is the increasing size of YC cohorts and the acceptance of companies both within and outside the U.S. There were 141 companies from 24 countries in the winter 2018 batch, compared with 377 companies across 47 countries in the summer 2021 group. The second is that companies YC backed four to five years ago, after raising a series of venture capital rounds, are now commanding huge valuations that they didn’t have in 2018.
What this means is that more companies, particularly outside the U.S., have joined this desirable list. Case in point: No African company made the list in 2018. Now, there are six.
Of the 267 companies valued at $150 million or more, over 60 of them (private and public) are valued at $1 billion or more. The top 10 are Airbnb, Stripe, Coinbase, Instacart, DoorDash, Cruise, OpenSea, Faire, Brex and GitLab (OpenSea, Brex and GitLab represent the crème de la crème of the 11% that are remote companies).
YC says 16% of the companies in its current list (44 out of 267) are based outside the U.S., compared to its first list, which included just seven non-U.S. companies.
According to the accelerator, six new countries home to these companies are making their appearance for the first time: Algeria, Tunisia, Senegal, Chile, Brazil and Singapore. And of the companies that are new to the list, 28% are outside of the U.S.
Regions with the most growth from 2021 are India, Latin America and Africa, the accelerator notes. There are eight Latin American companies, with six new to the list; of Africa’s six representatives, five are new to the list; and India has 10 companies, of which three are making their entrance for the first time.
“We always said YC is founded on the principles that talent is globally distributed. It’s all about investing in the best founders that have a unique insight and are willing to crack on those problems,” Anu Hariharan, partner at YC Continuity Fund, the accelerator’s growth stage fund, told TC. “We don’t even have any presence anywhere outside the U.S., but the formula is working, which tells us that generational companies are being built everywhere, not just in the U.S.”
Asides from the U.S., no other country has more YC representatives than India. The South Asian nation is also responsible for producing the first company based outside the U.S. to be ranked in the top 10 most valuable private YC-backed companies: Razorpay. The fintech, which is 14th overall on the list, was valued at $7.5 billion after its latest round.
Razorpay was one of the earliest startups backed in India alongside Meesho (23rd), the second most valuable YC-backed company in India. Now, the country is home to over 100 YC-backed companies.
Hariharan, who is Indian American, said this progression is a ripple effect of the success of YC’s earliest companies in the country. According to her, when one or two YC-backed companies in a region begin to scale while raising huge amounts of capital, it inspires other founders to apply to YC. India accounts for the second-largest volume of applications to YC.
“What does it take fundamentally, to start a startup, it’s courage,” she said. “India has a large concentration of software developers, and they, of course, can start a company. But you need courage to start a company versus going and doing a job. So when they see their peers like Razorpay doing so well, you start seeing a lot more people saying, ‘Let me at least try and work on a startup,’” said the partner, whose YC Continuity Fund has backed Razorpay and newer Indian upstarts Groww (39th on the list) and Zepto (114th).
Other Indian companies on the list include Khatabook (110th), Instawork (115th), Clear, formerly Cleartax (127th), OkCredit (177th), Cashfree Payments (224th), and Fampay (264th).
The same phenomenon can be said for Latin America and Africa. Colombia’s Rappi, the super app valued at $5.25 billion and 21st on the list, and Nigeria’s Flutterwave, the payments company that recently reached a valuation of $3 billion and is 36th on the list, opened the door for other companies across both regions to get into YC.
Rappi and Flutterwave have been on the list since 2018 and 2019, respectively. Other companies in Latin America include Frubana (103rd), Kovi (143rd), Nowports (160th), Fondeadora (180th), Fintual (227th), Houm (232nd) and Belvo (255th).
In Africa, there’s Wave, the spinoff company of WorldRemit-subsidiary Sendwave at 54th, Reliance Health (204th), Stripe-acquired Paystack (233rd), Yassir (247th) and Kudi (263rd).
There’s no doubt that this new crop of multimillion- and billion-dollar companies from emerging markets will continue to grow considering YC’s intention to increase its batch to 1,000 startups and double down on these regions with its new sweetened deal. However, one would be too optimistic to think they’ll grow at a fast pace (the percentage of companies headquartered outside the U.S. last year was 14%, compared to 16% this year).
That said, although Y Combinator seems not to have cracked the code on the diversity front with respect to founders’ representation, it has made some headway in the geographic representation of its most valuable companies.
