by Geoff Ralston1/19/2022
In June, I wrote a blog post comparing YC to CRISPR. When a founder is accepted into YC, we modify the startup’s DNA, edit it, to include key alleles that make success more likely. In the end, however, the secret to success of any startup lies squarely with the founders — their vision and their execution. We simply help those founders discover the very best versions of themselves.
In 2021, many YC founders led their companies to achieve outstanding results, and we are honored to be part of these companies’ history. This year presented an exceptional challenge to startups and established companies alike as the world struggled through a full year in the grip of the COVID-19 pandemic. As we all stayed remote and worked to operate effectively without offices, the startup environment thrived. Seed funding grew 56 percent year over year and totaled $29.4 billion in 2021, per Crunchbase data, with more than 17,000 startups around the world raising funding at seed.
Of course, YC itself remained remote during 2021, as did all of our programs. Like most of the world, there were ups and downs. Some of us fell ill, but thankfully none seriously. We believed towards the end of 2021 that the pandemic was entering an easier phase, only to be confronted, like everyone else, with Omicron. Despite this unique macro environment, there were many notable liquidity events for YC companies.
Prior to 2021 a total of four companies we funded had entered the public markets. In 2021 an extraordinary ten YC companies went public.
Also, in 2021 there were a number of companies that had significant exits via an acquisition. Here are highlights:
Our batch program funded 750 companies in 2021 — the most ever in a year. The YC admissions team sifted through tens of thousands of applications and the selection team, including all of our Group Partners, reviewed thousands of apps until our eyes blurred. And then we sat for thousands of virtual interviews for each batch. In the end, we funded 350 companies in the Winter 2021 batch and 402 companies in the Summer 2021 batch. Demo Day for both batches remained completely virtual of course, but it was remarkably successful as more than 3,000 investors attended and YC companies raised record amounts of seed funding.
YC’s Continuity funds are now maturing. We launched the first YCC fund over six years ago and in 2021, YC participated in the funding of several of our most successful companies.
Valuations of YC companies have continued to soar and today 150 companies are valued at $150 million or more and 60 companies are valued at $1 billion or more.
I would be remiss not to mention that YC wouldn’t function without the people that make up this organization. At YC, we are founders, operators, and experts; we’re building the programs that we wished we had as founders and working as experts and operators alongside our companies. We are growing our team to support these programs, and in 2021, we welcomed 30 people to YC. Key additions in our software, legal, and finance teams helped those teams scale to meet the needs of an ever expanding number of founders, companies, and deals to manage. And in 2021 our Outreach team helped launch hundreds of companies and organized dozens of YC events at schools around the world.
A few program highlights:
If you made it this far, well I am impressed. Thank you! I’ll just end here by pointing out that, like our companies, Y Combinator is always evolving and never stagnant. We have big plans for 2022 and will continue to iterate to provide the best founders in the world with the best programs and tools to improve their chances of outsize success.
Geoff Ralston is the former President of Y Combinator and has been with YC since 2011. Prior to YC, he built one of the first web mail services, RocketMail which became Yahoo Mail in 1997.