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There Will Be Multiple $10 Bn Startups Started In India, Says Y Combinator’s Sam Altman

There Will Be Multiple $10 Bn Startups Started In India, Says Y Combinator’s Sam Altman

Sam Altman, President of the US-based startup accelerator YCombinator, foresees India spawning multiple $10 Bn startups in the next five years, reports TOI. Altman will be himself visiting India this year to meet startup founders, and scout for the ones to be funded by the YC programme.

Altman added that “India is one of the largest and fastest growing markets globally and that’s why we have been investing in Indian startups over the last couple of years. I think there will be multiple $10 Bn plus companies which will be started in India in the next few years, and hopefully, we will get a shot at funding some of those.”

The accelerator has funded two companies in India, Cleartax and Razorpay. ClearTax is a product designed for individuals to prepare and file their Income Tax Returns in the shortest time while maximising their tax deductions. It raised $120k in seed funding from Y Combinator in July 2014. Razorpay is a Jaipur-based online payment startup which again raised $120K funding from YCombinator in March 2015. As a part of the deal, Y Combinator will also provide the startup with three-month acceleration. The funds will be used for covering compliance expenses for setting up a payment gateway and product development.

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.

The accelerator does about 115 companies in a batch and has funded over 800 start-ups since 2005. Twice a year, it invests $120k in startups for a 7% stake. The selected start-ups 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.

It’s hardly a wonder that Y Combinator sees huge potential in the Indian market given the fact that the home bred ecommerce giants like Flipkart and Snapdeal are now currently valued at $15.5 Bn and $5 Bn, respectively. Home-grown taxi-hailing app Ola, which recently raised an undisclosed amount of funding from China’s largest taxi aggregator app, Didi Kuaidi, is also finalising the second tranche of $200 Mn of its $500 Mn financing round, which will put its valuation at $5 Bn.

These skyrocketing valuations have however attracted their share of criticism as well. Prominent Silicon Valley investor, Vinod Khosla, had recently stated that India’s ecommerce giants Flipkart and Snapdeal might be overvalued and so was the case with about 85% of Indian ecommerce firms.

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