By most measures, Y Combinator (YC) is far and away the most important incubator in the technology space. Graduating from there is like facing the job market with a resume boasting summer internships at Google, Facebook AND Goldman Sachs. You are almost guaranteed a multi-million funding.
Fintech (note 1) has been part of YC from the beginning. The first class (Summer 2005) included one fintech startup, TextPayMe, among the eight companies. TextPayMe was acquired shortly thereafter by Amazon for a rumored $3 million.
But as YC grew from 2005 to 2009, the number of fintech companies stayed at roughly 1 per year. During those five years, YC graduated 5 fintech companies out of a total of 139 (3.5%). Suddenly in 2010, the fintech number grew dramatically, average of more than 7 per year. During the past 4.5 years, there have been 35 fintech startups out of a total of 406 (8.6%) (see note 2).
Table: YC Fintech Companies by Year
|Class||Total Companies||# Fintech Companies||% Fintech|
|2014 (half year)||56||5||9%|
Source: Y-Combinator (yclist.com), Finovate analysis
(see note 1 for Fintech definition)
List of fintech YC alums by year
2014 (Winter class only)
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1. We are using a broad definition of fintech including payments, insurance, investments, gift cards and even a few that are ecommerce focused such as E la Carte which is an order entry and payments play for restaurants.
2. Some YC companies are in stealth mode, so this public list is not 100% complete.