What are the startups of the future building?

Twice a year, accelerator Y Combinator hosts YC Demo Day, where its latest startup cohort pitch to investors and the media. At the September 2022 event, 223 founders presented their business ideas.

These innovators no doubt have visions of following in the footsteps of other wildly successful Y Combinator alumni, such as Airbnb, Stripe and Instacart. Let’s break down some of the major categories presented at the event.

Fintech and crypto

About 20% of the event’s presenters were fintech and crypto startups. That figure includes 11 neobanks, which operate exclusively online with no physical branch networks, some of which target a particular demographic.

Among the fintech pitches were a neobank offering Swiss U.S. dollar offshore accounts for the middle class in distressed economies, and an app that automates savings and then invests them in gold.  

Although the crypto market has cooled, and the vulnerability of crypto wallets to attack remains a central problem, crypto startups still made a showing at the event. Some 13% of the startups in YC’s latest batch were crypto companies versus 6% in the previous cohort, according to TechCrunch.

Climate tech

Nine companies presenting fell into the climate tech category, although some of these also fell into multiple categories. For example, one startup presented how it engineers textiles from food waste, while another showed it builds robotic mushroom farms.

A plant-based seafood company and a startup that makes software for renewable developers to identify the best places to build their projects were among other presenters.

Enterprise

Almost 40% of the startups at the September 2022 YC Demo Day were enterprise-based operations. Among their offerings were software that syncs millions of HR data with SaaS vendors, and a billing system that makes it simple for SaaS businesses to bill customers based on usage.

Separately, another startup enterprise presented its software aimed at detecting and analyzing business risks, while another pitched its scalable, cloud-native Git alternative.

Mental health

With talks of a mental health crisis continuing to dominate popular culture – and investors taking notice – not surprisingly, nine mental health-related startups presented at YC Demo Day.  

Among the most compelling were an app for kids with ADHD and a proprietary brain stimulation device that lets people with depression get treated from their home rather than in a hospital setting.

Creator companies

Based on the scant number of such companies presenting at the event, one thing that isn’t going up is the market for creators and influencers. As Biz Carson wrote about YC Demo Day in Protocol, “Despite all the creator economy hype, there didn’t seem to be much interest in building for influencers.”

One of the few that stood out is a fashion resale marketplace powered by video and livestreaming. Another is a tool that helps creators monetize fans via NFTs and livestreams.

Intriguing concepts

A few YC Combinator standouts defied categorization, in a good way. For instance, there is the dating app that filters out casual dates so people can date one person at a time. A tool called Needl promises to make searches across Gmail and Slack much more seamless. And one startup debuted semi-autonomous tech aimed at enabling 10 times more people to fly their own planes.

Emerging trend alert: taglines

As evidenced at the event, the trend nowadays when it comes to marketing a new startup is a tagline that contains a comparison. Not only does it give a snapshot to people as to what you’re about, it also helps imbue sense of familiarity to your product.

For example, Numi Foods’ tagline is “We are doing for seafood what Impossible did for meat,” and Ten Lives’ is “Impossible food for pets.” Hero uses the tagline “the Bill.com for Latin America,” and at least at the time, Deekard’s tagline was “Grammarly for data.”

Wrapping up

While few if any of the YC Demo Day startups will reach the rank of a $1B unicorn, they do provide valuable information about what entrepreneurs are focusing on in the post-pandemic environment. What remains to be seen is how many companies get funded in this watershed year for the future of startup finance.

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