May 09, 2016, anysilicon
An interesting report from Y Combinator shows increase in number of hardware companies applying to their accelerator program.
Software is eating the world but often that software is going to come packaged in beautiful, piece of hardware. While VC’s believe it takes $80M to get a semiconductor company off the ground and VC’s want a 10x return on their investment, Y Combinator is hard at work funding hardware companies.
Y Combinator is an American seed accelerator, started in March 2005. Fast Company has called Y Combinator “the world’s most powerful start-up incubator”.
In its main program, Y Combinator interviews and selects two batches of companies per year. The companies receive seed money, advice, and connections in exchange for 7% equity. The program includes “office hours”, where startup founders meet individually and in groups with Y Combinator partners for advice. Founders also participate in weekly dinners where guests from the Silicon Valley ecosystem (successful entrepreneurs, venture capitalists, etc.) speak to the founders.
Since 2008, Y Combinator received tens of thousands of these applications. Collectively, they provide insights into the ideas smart people are working on and how it’s changed over time.
But recently, Y Combinator commissioned Priceonomics and their data studio to analyze eight years’ worth of our anonymized application data. After breaking the applications down into keywords, they calculated the percentage of applicants that mentioned any given term.
The analysis shows that hardware is increasingly popular. Some of this reflects changes in the mix of startups applying to Y Combinator. Y Combinator originally focused on software companies but in the last few years has expanded to fund companies in every space.