Entrepreneurship

Where is Y Combinator startup-hunting in 2022? • TechCrunch

Digging into the latest accelerator with an asterisk cohort

Like the startup ecosystem itself, accelerators change with time. Techstars has expanded to a network of programs, to pick one example. Y Combinator, perhaps the best-known startup accelerator, has also evolved. It now offers more capital to chosen companies than ever and is in the process of working out how its program will operate 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 U.S. program is around 40% slimmer, featuring only 240 companies compared to the preceding batch’s 400.

That change had us curious about the second-order effects of admitting fewer companies into the program: What would a smaller batch do to the geographic makeup of the companies at the accelerator?

Before we dive into the data, a caveat concerning remote work: Per the accelerator, more than one-third (35%) of startups in its present program are remote, and even more (37%) are what it calls “remote-friendly.” Remote work and partially remote teams dilute the importance of where a company is “based.”

This is not a new trend. COVID led to a host of startups being born in a remote-first world, meaning that the hiring in the last few years has often been distributed. Never has it meant less to be based in, say, the United States, if your team is spread across countries and time zones. Still, where a company is domiciled still means something and tells us where companies are basing themselves to best collect talent, capital and exit possibilities.

There’s only one Colombian startup in the current batch, which takes things back to pre-COVID levels.

Let’s see where Y Combinator’s most promising young tech companies come from to get a loose barometer of where the accelerator is finding the most intriguing founders to back.

Global overview

Given its smaller size, the fact that this year’s Y Combinator group represents fewer countries is not a surprise. Per the investing group, the Summer 2022 class has startups from 34 countries, down from the 42 countries in the Winter 2022 cohort.

Notably, that decrease is only slightly less than 20%, which is about half the 40% drop in the total number of startups accepted into the program, as we mentioned above. It appears geographic diversity in terms of the countries represented did not decrease linearly with the reduction in batch size.

Its diversity may not have shrunk as much as some might expect, but this cohort is still more centered on the United States than before. Per the company, about 58% of its present batch are based in the United States, up from 50% in the Winter 2022 cohort.

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