Just like the beginning The ecosystem itself, the catalysts change over time. To take one example, Techstars has expanded into a network of programs. Y Combinator, perhaps the best-known startup accelerator, has also evolved. It now offers more capital than ever before to selected companies and is in the process of finding out how the program will work in a post-Covid world.
Like much of the venture capital landscape, Y Combinator has slowed down a bit this year. The pool of startups in the US program is around 40% thinner, featuring just 240 companies compared to the previous batch of 400.
That change made us curious about the secondary effects of having fewer companies enter the program: What would a smaller group do to the geographic location of the companies?
Before we get into the data, a caveat about remote work: Just over a third (35%) of startups are remote in their current program, and even more (37%) are what they call “remote-friendly.” He said. Remote work and semi-remote teams undermine the importance of a company being “based”.
This is not a new trend. Covid has spawned a number of startups in the remote-first world, meaning that hiring over the past few years has often been spread out. If your team is spread across countries and time zones, it never makes less sense to be based in the United States. Still, where a company is domiciled still means something, and it tells us where companies can best gather talent, capital and exit opportunities.
There is only one Colombian startup in the current batch, which will bring things back to pre-Covid levels.
Let’s take a look at where Y Combinator’s most promising young tech companies come from to get a loose barometer of where the accelerator finds the most amazing founders.
Global overview
Given its small size, it’s not surprising that this year’s Y Combinator cohort represented fewer countries. According to the investee group, the summer 2022 class has startups from 34 countries, out of the 42 countries in the summer 2022 group.
Specifically, that reduction is slightly less than 20%, which is about half of the 40% reduction in the total number of startups accepted into the program as we mentioned above. Geographical disparity in terms of the countries represented does not appear to have decreased linearly with decreasing group size.
The gap may not have narrowed as much as some might expect, but this group is still more American-centric than before. According to the company, 58% of the current batch is based in the United States, compared to 50% in the Winter 2022 batch.
