Dig into the latest accelerator with an asterisk cohort
Like the startup ecosystem itself, accelerators change over time. Techstars has grown into a network of programs, just to name one example. Y Combinator, arguably the best-known startup accelerator, has also evolved. It now offers more capital to select companies than ever and is working out how its program will work in a post-COVID world.
Like much of the venture capital landscape, Y Combinator has shrunk slightly this year. The current cohort of startups in the US program is about 40% leaner, with only 240 companies compared to the 400 from the previous batch.
That change made us curious about the second-order effects of allowing fewer companies into the program: What would a smaller batch do to the geographic makeup of the companies at the throttle?
Before we dive into the data, a caveat regarding remote work: According to the accelerator, more than a third (35%) of startups in the current program are remote, and even more (37%) are what it calls ” remote friendly.” Working remotely and partially remote teams dilute the importance of where a company is ‘based’.
This is not a new trend. COVID has caused a large number of startups to be born in a remote-first world, meaning recruitment has often been divided in recent years. It has never meant less to be based in, say, the United States, when your team is spread across countries and time zones. But where a company is located still means something and tells us where companies locate to gather talent, capital and exit opportunities.
There is only one Colombian startup in the current batch, bringing things back to pre-COVID levels.
Let’s take a look at where Y Combinator’s most promising young tech companies are coming from to get a loose barometer of where the accelerator finds the most intriguing founders.
Given its smaller size, it’s no surprise that the Y Combinator group represents fewer countries this year. According to the investment group, the Summer 2022 class has startups from 34 countries, fewer than the 42 countries in the Winter 2022 cohort.
Notably, that drop is only slightly less than 20%, which is about half of the 40% drop in the total number of startups being accepted into the program, as we mentioned above. It seems that the geographical diversity in terms of the countries represented has not decreased linearly with the decrease of the batch size.
Diversity may not have shrunk as much as some might expect, but this cohort is still more focused on the United States than before. According to the company, about 58% of the current batch is based in the United States, up from 50% in the Winter 2022 cohort.