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Thursday, April 3rd, 2014

Y Combinator is Now a $20 Billion Investment Incubator

y-combinator

Y Combinator, the incubator that helped seed Dropbox Inc. and Airbnb Inc., has invested in companies that are worth more than $20 billion combined, an increase of almost 40 percent from last month.

About 17 companies funded by Y Combinator are worth more than $100 million each, Sam Altman, who was named president of the incubator last week, said today in an interview on Bloomberg West. The $20 billion in value that Altman cited is up from $14.4 billion on Jan. 13, according to a tweet at the time from Paul Graham, Y Combinator’s founder.

While Altman wouldn’t provide a breakdown, he said that Dropbox and Airbnb “obviously are the biggest.” Dropbox recently raised money at a $10 billion valuation, up from $4 billion in 2011. Payments startup Stripe Inc. also received funding last month at a $1.75 billion valuation and “there are many more that are zooming up the ranks very, very quickly,” Altman said.

Y Combinator, based in Mountain View, Calif., was started in 2005 as a way for teams of technology entrepreneurs to come together for a three-month crash course. Twice a year, Y Combinator gives small sums of money to newly-formed startups, also giving them access to professional advice and the chance to pitch their businesses to top-tier venture capitalists.

Dropbox went through the program in 2007. Room-sharing service Airbnb followed two years later and was valued at about $2.5 billion as of late 2012.

Y Combinator has funded more than 630 startups, according to its website. They include Reddit, WePay Inc., Hipmunk Inc. and Loopt Inc., the mobile location startup co-founded by Altman before he became a partner at the incubator. Loopt was acquired by Green Dot Corp. (GDOT) in 2012.

“We will make very high-risk bets,” Altman said. “We’d rather fund something that could be the next Airbnb or Dropbox than something that will definitely be a $10 million exit.”

Source: bloomberg.com

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