The latest Y Combinator cohort showcases over 200 startups, with a noteworthy shift towards AI-focused ventures among the S23 batch. This trend signals a dominant trajectory for the future. Remarkably, this batch stands out for yet another reason: it includes only one firm from India/Southeast Asia, as per YC’s official directory.
The dwindling presence of Indian and Southeast Asian startups in Y Combinator is emerging as a noticeable trend. Previous batches exhibited more substantial numbers, with 10 startups in the prior batch, 20 in S22, 37 in W22, 33 in S21, and a peak of 44 in W21. (It’s worth noting that some Indian startups register in the U.S., potentially complicating the analysis by blurring distinct national identities.)
A YC spokesperson explained to TechCrunch that this decline is attributed to YC’s return to in-person events, necessitating founders to relocate to the U.S. for a quarter of the year. This shift is proving to be a challenge for an increasing number of international startups.
“We’ve discovered that there’s no substitute for in-person interaction with fellow founders and investors during the three months of YC. However, one consequence of this is that international founders are facing difficulties participating due to visa constraints,” the spokesperson stated.
In recent years, the U.S. government has intensified visa scrutiny, particularly for countries with high visa overstays, citing national security and illegal immigration concerns. Visa opportunities for Indian citizens have also dwindled.
For instance, the founders of GigaML, renowned researchers who trained Llama2 to outperform Anthropic Claude 2, were compelled to conduct their office hours over Zoom because their U.S. visas were denied twice by U.S. Immigration. Founders aspire to come to the U.S. but encounter obstacles. This has prompted a call for policy changes, as emphasized by the YC spokesperson.
While many founders and investors in India concur with YC’s assessment, some argue that the U.S. giant needs a broader regional focus to maintain its appeal. (These individuals spoke anonymously to avoid causing any discomfort among their peers.)
Peak XV, a rival seed-focused program, is gaining favor among local entrepreneurs by offering more attractive terms and resources tailored to the local context.
A high-ranking executive at a prominent VC firm has also underscored that YC’s insistence on Indian startups registering in the U.S. is becoming problematic for many of these entities.
The recent situation involving Silicon Valley Bank has adversely affected Indian companies that were U.S.-registered and relied on the now-controversial bank for their finances. Additionally, as numerous seasoned Indian startups reorient their operations back to India, they face significant tax implications, which is far from ideal.
Moreover, as previously highlighted by TechCrunch, India currently has a limited depth in AI startups, which might also contribute to the decline in representation.
