Last year, Sam Altman, President of the US-based startup accelerator YCombinator, had stated that he foresees India spawning multiple $10 Bn startups in the next five years and hopefully, wanted to get a shot at funding some of those. No wonder, this year, for the first time, Y Combinator has inducted three Indian startups into its summer batch, making it by far the largest representation of Indian companies at one of Silicon Valley’s most sought after accelerator programmes. These include co-working space Innov8, self-drive car rental app JustRide, and Meesho, an app for sellers on Facebook and WhatsApp.
These three Indian startups have been selected by YC for a three-month programme based out of its Mountain View headquarters. The accelerator invests $120K in startups for a 7% equity stake in the selected startups. It normally takes in a large number of startups (107 this year) and has funded over 1,000 startups since 2005. The selected startups then move to the Silicon Valley for 3 months, where it also helps them pitch to investors. Its portfolio includes companies like Airbnb, Dropbox, and Instakart.
Speaking to TOI, Sam Altman, president of YC, said, “Each of the founders from India in the current batch has personal experience with the problems they are solving, which gives them unique insights into the market they operate in. India is now only second to the US in terms of applications received from a country, higher than Canada or the UK.” Altman however did not disclose the exact number of applications that came in from India.
He added that Innov8, JustRide, and Meesho are focused on building for India which is an exciting, growing market. Innov8 Co-working, which had started its journey with its Delhi centre in October last year, has recently opened its second centre in Chandigarh. The Delhi centre had received a whopping 1,000 applications when it opened, and now houses 50 companies and 150 members. Founder Ritesh Malik told Inc42,
“ We’re super excited to be a part of YC Summer ’16 batch. It’s an honour for us, as YC is super selective, getting into YC is infinite times harder than getting into Harvard etc. From India, very few companies have been a part of it in the past 10 years. It’s a completely transitional experience, you learn so so much & the exposure of Silicon Valley & product first mindset is imbibed into your thought process.”
He added that the program, is a three month schedule full of Silicon Valley exposure, focussing on product improvisation & execution without any distraction. Being selected by YC is helping the Innov8 team a lot with Ritesh and co-founder Shailesh in the valley, getting an opportunity to meet people they wouldn’t have met earlier. He concluded, “They open your thought process & remove the mental barriers which you have. It’s a completely thought provoking experience. Plus the people are so nice, and supportive, they’re ready to help you for everything.” With this selection, Innov8 would now look at models and expansion strategies to make brand Innov8, a powerhouse of Indian intellectual pool.
The selection of these three startups again reiterates the fact how bullish Altman is on the Indian market despite the recent slack in funding and fall in valuations of Indian biggies. Interestingly, YC broadened its investment areas and expanded into emerging markets like India after Altman took over in 2014 from co-founder of YC, Paul Graham. The accelerator is now diversifying actively to fund the very best companies in the world. Over the past two years, it has been also diversifying geographically to fund startups from India, China and South America, particularly those which are solving local and global problems.
Ashwarya Singh, CEO and Co-founder of JustRide told Inc42, “Over the years, Y Combinator has churned out a plethora of startups who have revolutionised the tech industry. JustRide aims is to change the way cars are purchased and used. Our association with Y Combinator would assist in bringing this vision to fruition. A 3 month mentorship program is currently underway at Mountain View, California. Our experience at Silicon Valley has been enlightening as we have received key inputs from our mentors on tweaking our model and technology to better serve the burgeoning rent-a-car industry in India.”
Earlier, YC has funded two Indian startups — ClearTax, an online tax return filer, and payments gateway Razorpay. ClearTax recently announced a $12Mn financing round led by venture fund SAIF Partners with prominent Valley investors like Peter Thiel’s FF Angel, AngelList’s Naval Ravikant, PayPal’s co-founder Max Levchin and Sequoia Capital, among others, having funded it at seed stage. Razorpay, which has raised a total capital of $11.5 Mn from a bunch of investors like Tiger Global, Matrix Partners and Y Combinator, has recently raised an undisclosed amount from MasterCard as part of its collaboration to speed up the adoption of online and mobile payments among small businesses in India