Ten years. That’s how long it took the world’s biggest and most successful startup accelerator programme, Y Combinator (YC), to find the first Indian startup which would make it to its coveted classrooms in California. The year was 2014 and the Indian company was tax filing startup, Cleartax*. If that was to be the year YC would belatedly start paying attention to the Indian startup opportunity, it could not have picked a better one. Because 2014 and 2015 would turn out to be the most exuberant years for Indian startups.
But that was not to be. YC would only end up admitting that one startup in all of 2014 (it runs two accelerator batches each year, Summer and Winter). In 2015, it admitted two. In 2016, six.
Being part of YC is a big deal. The roster of YC alumni includes close to 1500 companies (though many have shut down or got acquired) around the world, including unicorns like Airbnb, Dropbox, Instacart and Stripe. The YC brand name and access to its alumni network are still the closest things to Willie Wonka’s golden ticket in the accelerator space.
YC startups are fond of using the word “pivot” to describe a strategic shift towards a newer opportunity. Perhaps pivot would be the best word to describe YC’s attention for Indian startups in 2017. Because 20 Indian startups are part of YC in 2017, including 12 in just the latest batch.
Adora Cheung, a partner at YC agrees that her trip to India in 2016 with YC partner Timothy Brady changed the game for the programme. It was part of an 11-country tour and India is on the list this year too.
“Just physically going to India had a measurable impact on the number of applications submitted. Part of it was just getting rid of the misperception that we didn’t fund founders from India working on India-specific problems,” says Cheung. There has been a disproportionate increase in applications from India, Nigeria and various countries in Latin America as a result of the tour. India ranked second only to US in the number of applications received by YC for the batch of winter 2017.
Meanwhile, other accelerators, certainly not as successful as YC but just as ambitious in minting new ventures, have been actively incubating startups in India. In August, another US accelerator, TechStars, started its India operations. If in 2014 YC had a head start, in 2017 it has competition.
The three-month program at YC opens many doors for young startups. The accelerator invests $120,000 for 7% equity in early stage companies and has over 10 alumni which are valued at over $1 billion among the 1,464 it has funded since 2005. That is a high strike rate for companies starting out with dreams of being the next unicorn.
The programme makes world class mentors, YC partners, and top notch investors accessible to the new startups, the gamble for YC rests on at least one or two startups hitting valuation gold out of the 200-odd companies it admits every year.