On January 12, Y Combinator (YC), a US seed-stage accelerator, released its YC Top Companies list. According to a statement, the list was put together to help potential employees, partners, and late-stage investors know a wider set of YC companies.
A brief overview of the list shows more than 125 YC-backed companies valued at more than $150m. For startups with $1b or more in valuation, this number reduces to 25.
Although YC has kicked against the use of valuations in judging the progress and real worth of a company, it still used the vanity metric to create the list.
“We still believe this to be the case and consistently warn our companies not to over-optimize their fundraising for a high valuation. That said, it’s the most commonly available metric to compare companies in the startup world,” the statement read.
Flutterwave features again as Paystack is missing
Since launching in 2005, YC has invested in more than 2,000 startups around the world writing $125k-$150k cheques for a 7% equity.
In 2018, the accelerator published the very first list of its most valuable companies. Of the 101 companies, there was no African representative.
But that changed the next year when Flutterwave, a Nigerian fintech startup ranked 97 out of the 102 startups on the 2019 list.
At the time, the fintech startup had raised a total of $20.1m, but like most Nigerian or African startups in general, its valuation remained private. However, due to its position on YC’s list, many believed the startup was valued just slightly above $150m.
In this newly updated list, many startups switched positions to reflect the changes in valuation that occurred in 2020. For one, Airbnb overtook Stripe to become YC’s most valuable company after going public in December.
The accelerator also increased the number of startups on the list from 102 to 134. In total, these companies now have a combined valuation of $300b, up from a cumulative of $155b in 2019.
Flutterwave was once again the only African startup on the list for the second year running. But despite an increase in valuation after raising a $35m Series B round in January 2020, the five-year-old startup dropped 18 places to 115.
That said, one notable omission from the list is another Nigerian fintech startup, Paystack. With over 60,000 businesses using its payments platform in Nigeria and Ghana, Paystack got acquired by Stripe for $200m last year, a figure well over $150m.
So why wasn’t the six-year-old startup included? That answer may lie in two scenarios the accelerator painted.
According to the accelerator, for exits, it counted only the money that went to the cap table at the time of acquisition. “We did not include retention bonuses or the value founders and investors received from an acquiring company’s stock post-liquidation event.”
Also, YC said the list isn’t an exhaustive one as it allowed some startups not to be included for reasons best known to them.