Earlier this month, Razorpay was touted to become India’s fourth payments unicorn. The company is reportedly reportedly Entrackr Razorpay set to be unicorn with up to $150 Mn round led by GIC Read more in talks with existing investors and Singaporean sovereign wealth fund GIC to raise US$150 million at a valuation over US$1 billion. The fresh funding wouldn’t just make it the latest addition to India’s three-dozen-odd unicorn club, but it would also make it Y Combinator’s first Indian unicorn.
For the much-lauded Silicon Valley startup accelerator, founded by Paul Graham and Jessica Livingston in 2005, this is as much cause for celebration as it is for introspection.
Y Combinator’s touch has been Midas-like for the 2,000 startups 2,000 startups Y Combinator Startup directory Read more it has invested in all over the world. More than 100 of these companies have reached a valuation of US$150 million, with 20 among these going on to become full-fledged unicorns. Some, such as United States-based payments processor Stripe or home-rental platform Airbnb, are valued at tens of billions of dollars.
All told, the combined valuation of Y Combinator’s top companies is well over US$155 billion. India’s contribution to this murderers’ row of startups, however, isn’t much to write home about.
Despite investing in over 50 startups in India, Y Combinator’s list of top companies top companies Y Combinator Top companies Read more includes only three startups from the country—social commerce platform Meesho, fintech company ClearTax, and, of course, Razorpay. Even these three companies are, at best, mid-stage players within the Indian startup ecosystem. They are unlikely to find their names in a list of prominent startups within the country.
The lack of marquee startups in Y Combinator’s India portfolio could possibly be due to the fact that its original model—offering US$20,000 for 7% equity—was simply not enticing enough for Indian startups struggling to make ends meet. Though that amount was increased to US$125,000 later, it was too late. Indian startups had other options—like Sequoia’s Surge Sequoia’s Surge The Ken Decoding Sequoia's Surge Read more programme, which was loosely modelled on Y Combinator—that offered better terms.
That’s not to say Y Combinator hasn’t left an indelible mark on the Indian startup ecosystem. It changed India’s and investors’ perceptions about what a ‘fundable startup founder’ would look like. And it invested in companies from sectors that pretty much flew under the radar then, but grew to be prominent later on.
