The 10 YC Companies (W21) I’d Invest In

It’s Demo Day (again)!

But first, here are my past YC posts if you want to check how my older picks have done. If you want to skip to the bottom, you can also see my own evaluation of my past picks for S20, W20, S19, W19, S18, W18, and S17.

YC’s Winter 2021 class set a new record for HUGE!

319 startups, representing 41 (!) different countries, pitched virtually on 3/23/21.

Quick Diversity Stats on W21:

  • Female founders: 19% of the companies have a women founder, 10% of the founders are women
  • Black founders: 7% of the companies have a Black founder; 5% of the founders are Black
  • Latinx founders: 13% of the companies have a Latinx founder; 14% of the founders are Latinx

Top YC W21 Categories:

  • B2B Software and Services — 46%
  • Financial Technology and Services — 15%
  • Consumer — 14%
  • Healthcare — 12%
  • Industrials — 6%
  • Education — 4%
  • Real Estate and Construction — 3%

More stats here

This was another non-traditional demo day and a non-traditional startup batch, to say the least, but let’s get to it, I’m excited to share my favorites!

The Top 10 Companies I’d Invest In

  1. VendEase — Instacart for Restaurants in Africa

TechCrunch Description: For small and mid-sized restaurants in Nigeria and most of Africa, food procurement can be a complex process to manage. The system is such that a business can easily run out of money or have considerable savings. Most restaurants don’t have access to deal directly with farms to get better deals because they lack the staffing to chase them. Besides, they also don’t have the aggregation pull as single entities to directly get good value from the farms.

Nigerian startup VendEase solves this problem by building a marketplace that allows restaurants to buy directly from farms and food manufacturers.

Why I Would Invest: African tech is (finally) having a moment and it’s very exciting! VendEase is attacking a similar root problem as another startup I’ve written about before: Tajir.

In this case, Nigerian (and African restaurants in general) have to deal with unreliable delivery, poor selection, a general lack of transparency and little access to credit. VendEase is stepping in at the right time here to offer that transparency, consistency, clarity, and credit and I’m confident they’ll be able to scale quickly in Nigeria before expanding throughout Africa.

2. KrediRocket Mortgage for LATAM

TechCrunch Description: Kredi operates as a marketplace for Mexicans looking for credit loans to assist with home buying and mortgages. The platform presents clients with a range of credit offers. They can then select the one that best fits their needs.

Why I Did Invest: It can take 6 months to buy a house in LATAM, and 4 months of that is the mortgage process (!)

Traditional banks in LATAM require reams of documentation and multiple calls or in-person visits to get a home mortgage. This is a LOT of work for the borrower and creates liquidity problems for sellers. The average time to close a mortgage in Mexico is 16 weeks.

Kredi’s fully online process can get an applicant pre-qualified in a few minutes and a mortgage completed in 4 weeks. Kredi has a major opportunity in Mexico before taking their model throughout LATAM.

3. SnazzySmileDirectClub for India

TechCrunch Description: Snazzy says it sells clear aligners that are 70% cheaper than those sold by dentists.

Why I Did Invest: SmileDirectClub went from idea to IPO in 5 years and has a current market cap of $4.1B. Market leader Invisalign is valued at over $20B.

Snazzy plans to disrupt the braces market in India at a similar price point with a much better D2C customer experience.

I’m cheering for both Snazzy and LATAM/YC twin Moons as I believe they can both dramatically lower the cost of clear aligners and share those economies with other markets around the world.

4. AtratoOffline/Online Affirm for LATAM

TechCrunch Description: Atrato takes the Affirm-style buy now, pay later (BNPL) model to Latin America. Given the growth that Affirm, Klarna and others have managed, there’s real demand for their products.

Why I Would Invest: Affirm has been incredibly successful in the United States and is currently trading at an $18B valuation(!) Atrato provides customers with 3–24 month loans on high AOV items (computers, bikes, furniture) and has already realized some strong traction.

If Atrato can keep up their growth and keep down their non-performing loans, they could be an attractive acquisition target for Affirm as that company looks to expand geographically.

5. TreintaKhatabook (Digital Ledger App) for Latin America

TechCrunch Description: Treinta is a digital ledger app for Latin American microbusinesses. Through Treinta, users can easily record transactions by assigning products from their inventory and see how their business metrics evolve in real-time. The app helps owners save up to 30 minutes a day in bookkeeping related tasks and improve efficiency by over 30%. Out of the 50 million microbusinesses in LATAM, 90% still track their sales and expenses by using pen and paper today.

According to co-founder Lluís Cañadell, Treinta grew its monthly active users by 400% for a few months after launching on August 31, 2020. The company expected 300% growth in January. Cañadell also told TechCrunch that his company expects to keep expanding at a pace of around 100% month-over-month for a few more months.

Why I Did Invest: Another digital ledger app, Alex?! Yes!

I’m incredibly bullish on digital ledger apps (and Treinta too) because they provide such valuable financial digital information that is completely locked up in pen, paper, and the business owner’s mind today.

Additionally, once you have that information about transactions, it’s a small step to banking, credit, and POS services, and much much more. Build the usage/retention behaviors and deliver value with the free app and then monetize in many different ways soon after that.

Thanks for reading! If you’re enjoying this post, I know you will enjoy the great content at The Modern Product Manager.

If you prefer books, I think you’d also enjoy Disrupting Yourself (How to Succeed in the New Economy) or Building Digital Products (Handbook for Product Managers).

6. GimBooks Mobile Invoicing and Bookkeeping in India

TechCrunch Description: GimBooks is attempting to solve a similar problem as CashBook, though from a different angle. The startup says it offers industry-based invoicing and bookkeeping with integrated banking and payments. Its app has been downloaded more than 1.4 million times, amassed over 11,000 paying customers and clocked revenues of over $450,000.

Why I Did Invest: GimBooks is driving some serious traction (1.4MM downloads) and meaningful revenue ($450k) for it’s simple mobile-first invoicing and accounting tools for Indian SMBs.

Did I mention they bootstrapped their way to these metrics? I’m completely fired up by these and other growth metrics the company has shared. The TAM is HUGE here.

7. Moonshot BrandsBuy + Grow Profitable eCommerce Companies

TechCrunch Description: Moonshot Brands is building the world’s largest — next-generation CPG (Consumer Product Goods) e-commerce company. They look for profitable e-commerce companies on Amazon or selling DTC on Shopify, purchase them from the founders giving them liquidity for their biggest asset, then turbocharge the growth with our proprietary data-driven technology platform and team.

Why I Would Invest: Moonshot Brands takes the idea introduced by Thrasio (An acquirer of successful Amazon Merchants) and amplifies it.

Moonshot searches for eComm companies in the $4–$30MM/year revenue band and helps get them to $100MM. The founders are uniquely positioned to solve this challenge as they’ve done this exact thing throughout their careers.

They plan to buy 20 businesses in 2021 and reach a $1B valuation by 2022. It sounds crazy, but given their skillset, if they can find the right targets and succeed in growing them, I think they just may pull it off!

8. Benga Credit Risk as a Service

TechCrunch Description: Benga helps companies quickly assess the creditworthiness of their customers and monitor it over time. They do this by providing the modular components needed to quickly build a complete credit-risk infrastructure.

Why I Would Invest: I don’t know about you, but I shudder when I hear “credit risk infrastructure” and I quickly imagine months and months of challenging development work. Benga is designed exactly for this use case.

While the company’s landing page doesn’t offer much information about the exact integrations and data they plan to offer, the problem they are focusing on is the right one and I, for one, am hoping they succeed!

9. DjamoChallenger Bank for Consumers in French-Speaking Africa

TechCrunch Description: Djamo, a financial super app for consumers in Francophone Africa, is the first startup from Ivory Coast to get backing from Y Combinator. While there has been a huge profusion of financial services that have emerged in recent years in Africa, Djamo’s mission is to try to plug one specific and very underserved gap in Francophone Africa.

In the region, less than 25% of adults have bank accounts, as the focus for banks remains the top 10–20% wealthiest customers. The rest, which is a huge segment of the market of about 120 million people, is not perceived as profitable. But as banks slacked, mobile money from the region’s telcos filled in the gap. In the last 10 years, their wallets have reached more than 60% of the population — proof of how many millions of French-speaking natives were hungry for financial services.

Why I Would Invest: The need for easy-to-use, simple, and accessible financial services in Africa is hard to overstate.

Djamo is attacking this problem with a similar playbook used by challenger banks around the world: a simple no-fee product, debit card, and easy to use mobile-first experience.

Why fix what isn’t broken? It’s currently a land grab for financial apps in Africa. Who will dominate the market? Only time will tell.

10. BimaplanAffordable Insurance for the Next Billion Indians

TechCrunch Description: Bimaplan is an affordable insurance platform for the next billion Indians. This is an $8 billion addressable market. They launched in February 2021, and went live with one insurance underwriting partner. Bimaplan is attempting to replace insurance agents with an app and reach users by a referral network.

They are on track to sell 1,000 policies in March 2021.

Why I Would Invest: The average insurance premium in India today is $500 annually, which only the top 10% can afford. The next 150M Indian households could afford a $50 annual premium, opening up a $7.5B market in India alone.

As the middle class continues to grow in India, insurance is an incredibly attractive startup sector and Bimaplan is poised to be an insuretech that captures a significant amount of that value. It’s still very early days for the company, but I’m bullish on their D2C approach and the massive size of the market opportunity.

Honorable Mentions

  • Kanda: Affirm for general contractors
  • Friz: Credit card for freelancers in Asia
  • Udhaar App: Khatabook / OkCredit for Pakistan
  • Mono: Plaid for Africa, but better.
  • Finantier: Plaid for Southeast Asia

How Have My Picks from Past YC Classes Done?

S20

Too soon to report on the good, the misses, and the ?’s from the S20 YC class! Check back in a few months.

W20

The Good

The Misses

  • n/a

The ?’s

  • Pilot: Only has raised $120k from YC (or has not disclosed)
  • Trimwire: Only has raised $150k from YC (or has not disclosed) — Also had previously raised pre-seed round of $350k
  • Dashworks: Only has raised $150k from YC (or has not disclosed)

S19

The Good

  • Narrator: Raised $13.6MM in total funding, including a $6.2MM Series A in September 2020 and a $6.1MM seed round following YC.
  • EARTH AI: Raised $3.8MM in funding, including a $2.5MM Series A in August 2019. 13 employees on LinkedIn.
  • Well Principled: Raised $2.6MM in funding.
  • Tandem: Raised $7.5MM in funding, including a seed round with participation from Andreesen Horowitz. 17 employees on LinkedIn
  • Localyze: Raised a $1.3MM Seed round in August 2019.
  • Apero Health: Only has raised $150k from YC (or has not disclosed). Well-positioned though in the Corona-economy. Still has 10 employees on LinkedIn.

The Misses

The ?’s

  • Soteris: Only has raised $150k from YC (or has not disclosed). 6 employees on LinkedIn.
  • Lezzoo: Only has raised $150k from YC (or has not disclosed). 23 employees on LinkedIn.
  • SannTek Labs: Only has raised $150k from YC (or has not disclosed). 5 employees on LinkedIn.

W19

The Good

  • CareerKarma: Raised $10MM Series A in December 2020. Raised $1.5MM seed round in July 2019; 93 employees as of March 2021.
  • Superb-AI: Raised $9.3MM Series A in February 2021. Raised $2MM seed round in February 2019; 30 employees as of March 2021.
  • FlowerCo: Raised $2.8MM seed round in July 2019; 46 employees as of March 2021.
  • Boundary Layer Technologies: Raised $2.3MM seed round in March 2019; 5 employees as of March 2021.
  • Pronto: Raised $2.2MM in total funding; 30 employees as of March 2021.
  • Skill-lync: Only has raised $150k from YC, but appears active and scaling based on LinkedIn.
  • CareerTu: Only has raised $150k from YC; 20 employees on LinkedIn as of March 2021.

The Misses

The ?’s

S18

The Good

  • Kyte: Originally a Smart SMS inbox for India — rebranded as KhataBook, raised a $25MM Series A round in September 2019 and a $60MM Series B in May 2020.
  • OKCredit: Raised $1.7MM seed round in August 2018 and a $15.5MM Series A in June 2019. Raised $67MM Series B in 2019.
  • Berbix: Raised $2.5MM seed round in July 2019 and $9MM Series A in August 2020.
  • Alpha Vantage: Raised $2.2MM seed round in 2018, nothing raised since. 3 employees on LinkedIn.
  • Goodly: Raised $1.3MM seed round in March 2019, nothing raised since. 5 employees on LinkedIn.
  • CSPA: Raised $1.5MM seed round in September 2018, nothing raised since. 14 employees on LinkedIn.
  • Inscribe: Raised $3MM seed round in December 2018, nothing raised since. 13 employees on LinkedIn.
  • Scanwell Health: Raised $3.5MM seed round in November 2019. 21 employees on LinkedIn.

The Misses

W18

The Good

The Misses

The ?’s

  • N/A

S17

The Good

  • Standard Cognition: Raised $5MM (October 2017) from Charles River, Initialized Capital, and YC. Raised $40M Series A in November 2018. Raised $35MM Series B in July 2019. Raised $150MM Series B in February 2021. 129 employees on LinkedIn as of March 2021.
  • PayFazz: 458 employees on LinkedIn as of March 2021 and closed a convertible note after YC (September 2017). Raised $21M Series A in November 2018. Raised $53MM Series B in July 2020.
  • PullRequest: Raised a $2.3MM seed round from Google’s Gradient Ventures in December 2017 and then raised a $10.4M Series A in April 2018. 33 employees on LinkedIn as of March 2021.
  • Pop Meals/Dahmahkan: Raised $5MM Series A in May 2019. Raised $18MM Series B in February 2020. 59 employees on LinkedIn as of March 2021.
  • 70MillionJobs: Finalist in the Social and Culture Technologies Category at SXSW Accelerator Pitch Event. Raised $150k from Quake Capital Partners in March 2019. 10 employees on LinkedIn as of March 2021.
  • Zendar: Incredibly difficult to find information on this company over the past year, but they raised a $10.5MM Series A round in March 2019. 21 employees on LinkedIn as of March 2021.
  • Piggy: Pivoted into banking for couples: 21 employees on LinkedIn, but no money raised since YC.

The Misses

  • Ubiq: Little to no press since YC. Last blog post on the website is 10/30/17. I’m calling this one dead.
  • Net30: Similar to Ubiq, little to no press since YC. Down to 2 employees on LinkedIn. Haven’t raised money post-YC. I’m calling this one dead.
  • Plasticity: Only 2 employees on LinkedIn, no money raised since YC. No press since 2017. I’m calling this one dead.

Disclosure: Some of the links in this post are affiliate links, meaning that at no additional cost to you, I earn a commission if you click them and purchase a product.

Originally published at https://themodernproductmanager.com on March 28, 2021.

Product @Kinsured | 5x Product Leader/Founder | Blog: medium.com/@Amitch5903 | Author: @producthandbook @disruptbook | Newsletter: bit.ly/MPMnewsletter

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