What is YC?
If you work in tech or startup, you know about Y Combinator, or YC.
YC is the renowned startup accelerator, based in California, and was founded by Paul Graham, Jessica Livingston, Robert Tappan Morris and Trevor Blackwell, Co Founders of ViaWeb, which sold and rebranded to Yahoo! Store in 1988 for 455,000 shares of Yahoo! stock, valued at the time for $49.6 million.
Known for providing seed funding, guidance, and networking opportunities to startups, YC has helped launch more than 4,000 companies, including giants like Airbnb, Dropbox, and Stripe. Through its program, YC invests a small amount of seed funding in a large number of startups twice a year, helping them refine their ideas, develop their products, and connect with follow-on investors.
YC’s Investment into Africa
YC only accepts between 1.5% to 2% of applications, and has backed approximately 4,597 startups since its inception in 2005. Of these, around 100 startups are focused on the African market, as detailed in its directory.
YC’s first investment into an African startup took place in 2012 into Wave, a mobile money app from Senegal. Following this, YC began ramping up it’s investment into Africa, with a record of 31 investments in 2022.
Fintech dominates African investment
While YC’s investments into African startups has been somewhat agnostic, there’s a heavy weighting on Fintech as the payments race continues to heat up.
With over 50% of YC’s investments being Fintech focussed, it’s clear to see the pain points and opportunities they’re bullish on. Inadequate payment infrastructures and a fragmented payments space has made it difficult for individuals and businesses to receive and make cross-border payments in an efficient way. This has been particularly prevalent for payments from other continents into Africa - creating adverse conditions for freelancers, founders, and startups trying to operate globally.
With Nala Money’s recent announcement of their payments infrastructure solution, Rafiki.API, a single API for global businesses to make payments into Africa, the opportunity for smaller startups to build on top and leverage new cross-border payments solutions continues to grow.
Outside of Fintech, YC has invested in 18 B2B SaaS, 2 Education, 10 Consumer, 6 Healthcare, and 6 Industrials startups.
YC’S 2024 Investment into Africa
This year, YC’s investment into Africa seems to have taken a few steps back, with only 3 startups being backed in their winter batch. Two Nigerian fintech startups, Cleva and Miden, along with one Kenyan travel tech startup, Triply.co
Triply.co, who formed part of The Baobab Network's Cohort 3 in 2022, helps travel businesses collect payments and automate their operations.
While this batch marks one of the lowest investments into Africa in some time, the summer batch applications are still open with the application deadline closing on 22 April.
African accelerators and investment opportunities outside of YC
There are a multitude of alternative options for early stage startups in Africa when it comes to pre-seed investments and accelerator programs. Next week we’ll go into detail on what those options are, but they include the likes of The Baobab Network, Founder’s Factory Africa, Antler, Accelerate Africa, StartupBootcamp AfriTech, and TechStars Lagos to name a few.
Accelerators are critical to building Africa’s technology ecosystem, and together with various Venture Builders in Africa, are creating significant opportunities for the next generation of talent and startups across Africa.
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