Introduction

Y Combinator's (YC) Winter 2024 (W24) batch has brought together a diverse group of ambitious startups that provide solutions to a wide array of challenges across industries. As one of the most prestigious startup accelerators, YC continues to attract some of the brightest minds from around the globe.

In this article, we will delve into an analysis of YC startup batches. We compare the Winter 2024 cohort to the previous fourteen batches (seven years) to examine trends in AI-Based startups, founders from underrepresented groups, industries’ representation, and region diversification. We conclude by highlighting a few exciting startups in the YC W24 batch.

AI-based Startups

The AI industry is currently valued at over $196 billion and is expected to increase by at least 120% year-by-year. The growth in the industry is also clearly visible in the Winter 2024 batch with around two-thirds of the companies including AI technologies in their startups. A total of 28 companies from the cohort even included a variation of the term “AI” in the company name, further emphasizing the shift in trend towards more AI-based startups.

If we analyze previous batches, we can pinpoint Winter 2021 as the inflection point after which the proportion of startups in every batch that included AI as a core part of their technology saw an exponential increase.

The launch of ChatGPT in the Winter 2022 was a pivotal milestone in the world of Natural Language Processing and AI as a whole. From students to professionals, everyone embraced this technology and has adapted to it. The launch undoubtedly persuaded entrepreneurs to leverage NLP as a part of their solutions. Consequently, in Summer 2022, we witnessed a significant uptick in AI-based startups compared to the previous batch.

While the number of AI-based startups has been steadily increasing in the past few Y Combinator batches, indicating a positive trend, it seems to be plateauing out with the Winter 2024 batch, with an increase of around 5% from the previous batch. Based on this trajectory, we should expect to see a similar proportion of AI-based startups in the next Y Combinator batch.

Founders from Underrepresented Groups

1. Women-founded Startups

In the Winter 2024 batch, we see a significant increase in female-founded startups compared to the previous batch. The W24 batch has 54 women-founded startups, accounting for around 22% of the startups, a notable increase from the last batch’s ~16%.

The increase in the W24 batch not only represents the highest proportion of female-founded startups among the previous four batches but also marks the most substantial positive increase. This signifies a step towards greater gender diversity and inclusivity in the startup ecosystem.

However, it is important to note that the percentage of women-founded startups has historically remained on the lower end. Despite the current progress, the platform still has a considerable way to go before achieving gender parity and equal opportunities for female entrepreneurs.

2. Black-founded Startups

The W24 batch also shows an encouraging uptick in the percentage of Black-founded startups compared to the previous S23 batch. The increase is particularly notable as it follows a generally declining trend from W22 through W24. However, the overall fluctuating nature of the data does not suggest a steady trajectory toward increased diversity in YC startups.

3. Hispanic and Latino Founded Startups

The W24 batch shows a significant decline in the percentage of Hispanic and Latino-founded startups, with only 6% representation. The decline is concerning as it represents the lowest percentage of Hispanic and Latino-founded startups since Summer 2017. This underscores the need for proactive measures to enhance the inclusion of diverse founder groups in the startup landscape, ensuring that opportunities for innovation and growth are equitably accessible.

When examining these graphs, we noticed an interesting trend between the Summer 2020 and Summer 2021 batches. We generally see an increasing trend of women, black, Hispanic and Latino-founded startups during this period, which also coincided with the COVID-19 pandemic when most parts of the world observed quarantine measures. To further understand this trend, we plot how the proportion of remote-based and region-based startups changed over time.

Mapping Startup Landscapes: Remote and Location-Based Patterns

1. Remote Startups

The proportion of remote startups has been relatively high, averaging around 70% of the startups from Winter 2017 to Summer 2023 batches. In Summer 2020, we observed a spike where more than 80% of the startups were remote. This number remains stable through Winter 2022., likely indicating that the COVID-19 pandemic encouraged most startups to support remote work. However, we see a sudden decline after Winter 2022 which continues onto the Winter 2024 batch with only ~30% of the startups being remote.

2. Location-Based Patterns

In the Winter 2024 batch, around 75% of the startups were based in North America with the United States accounting for approximately 72% and Canada contributing 3%. This trend is consistent with previous batches, as the majority of startups have traditionally been based in the US and Canada. Since Winter 2022, there has been an increasing trend in the proportion of North American startups in each batch - except for a slight dip in Summer 2023.

Regarding other regions, 5.65% of the startups in the Winter 2024 batch were based in Europe, 0.81% in South Asia, 0.4% in Latin America, 1.21% in Africa, while Asia, the Middle East & North Africa, and Oceania did not have any representation in this batch.

However, when we compare the representation of different regions across time, we observe a distinct pattern. The values for most regions were generally higher between Summer 2020 and Summer 2021, before starting to decline again. This aligns with our previous finding of greater inclusivity during the period. This trend suggests that Y Combinator’s selection process during COVID-19 was substantially different, as there was a larger proportion of remote startups.

Trends in Industries

Consistent with previous batches, the Winter 2024 batch features a significant number of B2B startups, with 162 companies operating in this sector. On the other hand, industries such as Real Estate & Construction, Industrials, and Government have traditionally remained underrepresented. This batch follows the same pattern with only 2, 9, and 2 startups respectively in these industries.

However, the Consumer, Healthcare, and Fintech industries consistently attract significant interest in each batch. To better understand emerging trends, we will analyze these industries in more detail.

After a consistent decline in previous batches, the Winter 2024 batch shows an uptick in the percentage of startups operating in the consumer industry, rising from 6% in Summer 2023 to around 10%.

However, the Healthcare and Fintech industries continue their overall declining trend in the Winter 2024 batch. Given this trajectory, we can expect to see the same or a lower proportion of startups from these industries in the next batch.

The trends observed in the Consumer industry versus the Healthcare and Fintech sectors indicate a potential shift in focus or interest among entrepreneurs and investors within the Y Combinator community.

YC W24 - Interesting Startups

1. Artisan AI

Artisan AI focuses on creating “Artisans”, which are human-like digital workers designed to work alongside human teams to enhance productivity and efficiency. With a goal to revolutionize the workplace through integrating AI employees, Artisan AI’s approach is to provide solutions that require minimal human supervision.

The startup successfully raised $2.3 million to support the development of Artisans. Their first successful Artisan is named “Ava”, who specializes in outbound sales automation and can be set up in only 10 minutes. Its capabilities include prospecting, lead research, crafting and sending bespoke email sequences, and scheduling meetings into sales representatives’ calendars.

Artisan AI is currently working on two more products for which the waitlist is open: Liam, The Marketer, and James, The CS Rep.

2. Zep AI

Zep AI aims to enhance the functionality of AI assistants by integrating long-term memory capabilities. This approach allows the assistants to remember past interactions and utilize the information to provide more personalized and accurate responses to the users. By addressing limited context in AI assistants, Zep AI aims to change the way we interact with AI, making it more like a knowledgeable companion.

Zep AI has secured $2.3 million in its funding rounds to further develop and refine its long-term memory technology for AI assistants. For users who are interested in integrating this functionality in their application, Zep AI offers an open-source project that has received over 380,000 installs.

3. Shepherd

Shepherd is a learning assistant that aims to streamline the learning process by integrating AI-powered self study, affordable tutoring, peer collaboration, and analytics for personalized learning into a single package.

For students, Shepherd offers an end-to-end learning assistant that combines note-taking, flashcards, AI help, tutoring, and reminders in one place. For educators, it provides a platform that leverages AI without compromising educational goals by offering analytics, control over prompting, and academic integrity monitoring.

4. Magic Hour

Magic Hour offers a platform for AI video generation. It allows users to produce engaging, professional-quality videos easily through every stage of the process - from ideation to production. The platform is capable of producing several genres of videos such as music videos, sports, and marketing - each of them transforming lengthy processes down to just minutes without any editing skills required.

Magic Hour has integrated tools like Video-to-Video, Face Swap, Image-to-Video, Animation, and Text-to-Video in their platform to cater to different users’ needs. In addition to this, they feature sample templates to further speed up the process of video generation. Currently, Magic Hour has created 625,315+ AI videos.

5. Sonia

“Sonia” is an AI-powered Cognitive Behavioural Therapist (CBT) designed to make mental health support accessible to anyone, anytime, anywhere. With its voice-chat and text session capabilities, Sonia provides an immediate and affordable therapy option at just $200 per year.

The platform allows for personalized mental health support by understanding the user’s needs and preferences. To further enhance accessibility, Sonia has launched a mobile application, allowing users to access professional mental health assistance on-the-go.

Sonia aims to not only provide mental health support at any given time, but also equip users with strategies to help them navigate various situations effectively. Currently, the application on the App Store features a rating of 4.4, indicating success and users likeness.

By leveraging the power of AI and CBT principles, Sonia offers a comprehensive and accessible solution that promotes emotional well-being for individuals worldwide.

Conclusion

In conclusion, the analysis of Y Combinator’s Winter 2024 batch and previous batches reveals several trends shaping the future of the startup landscape. The exponential growth of AI-based startups underscores AI’s disruptive potential across industries. While progress has been made in increasing representation from underrepresented founders. The fluctuating data highlights the need for further inclusion efforts.

The pandemic-driven remote work surge and temporary increase in global representation suggests an opportunity to make the platform truly inclusive. Lastly, shifts in industry focus signal changing interests of entrepreneurs and investors. As innovation accelerates, embracing diversity while leveraging emerging technologies will drive sustainable growth in the startup ecosystem.