Y Combinator’s Winter 2021 Demo Day: Part One

The annual Y Combinator Demo Day has arrived once more! Today marks the culmination of the latest accelerator program, which represents the organization’s largest cohort yet. Over 300 teams will each have a single minute to present their ventures to a panel of potential investors.

This iteration of Demo Day is the third to be conducted as a livestream via Zoom. It also signifies the second time the entire program has been completed in a fully virtual environment.

YC’s Program Expansion

Geoff Ralston, president of Y Combinator, detailed the rationale behind the program’s growth to over 300 participating companies in a recent blog post. His insights explain the thinking that drove this expansion.

A comprehensive catalog of the Winter 2021 batch is available on the YC website. It includes details on each company, with filtering options for industry and geographic location. Note that companies which haven’t publicly launched are excluded.

Featured Companies

Given the sheer number of participants, reviewing every company individually can be time-consuming. Therefore, we’ve compiled a selection of those that particularly impressed our team.

This article represents the first of two parts, focusing on the companies that presented during the first half of the day’s sessions.

Our Perspective

As Alex Wilhelm previously noted, our team does not operate as investors. Consequently, we refrain from attempting to identify future “unicorns.”

However, we dedicate significant time to engaging with startups, covering their pitches, and sharing their stories. If you’re interested in learning which companies captured our attention, continue reading. We aim to highlight those that stood out during the presentations.

Key takeaway: Y Combinator’s Winter 2021 batch is its largest ever, showcasing a diverse range of innovative startups.

Prospa

Prospa is developing a neobank specifically designed for small businesses operating within Nigeria. The company operates on a subscription basis, with customers paying a fee of $7 each month.

Currently, Prospa has achieved $50,000 in monthly recurring revenue, demonstrating significant early success. This level of traction is particularly noteworthy given the current market conditions.

We identified Prospa as a promising venture due to Nigeria’s robust economic expansion and increasing population. Furthermore, the success of neobanks in various other markets, coupled with Prospa’s well-defined business strategy and initial performance, were key factors.

Target Market and Scale

Prospa is addressing a substantial market opportunity. The company estimates there are 37 million microbusinesses within Nigeria that represent its potential customer base.

This large-scale potential allows for considerable growth. Importantly, Prospa’s revenue model doesn’t rely solely on interchange fees, a common strategy among many neobanks.

— Alex

Blushh

Blushh is a new platform developed by former employees of Google, Amazon, Harvard, and BCG. It’s focused on providing a curated collection of brief, evocative audio stories specifically designed for women throughout Asia.

The company’s founders identified a significant gap in the market: a lack of adult content created by and for women. This insight led to a rapid initial traction, with 100 paid subscribers acquired within the first month of launch.

A New Approach to Sexual Wellness

Co-founder Soy Hwang articulated Blushh’s vision during their pitch, stating the company aims to revolutionize sexual wellness in a manner comparable to how Spotify and Audible transformed the music and audiobook industries.

What distinguishes Blushh is its focus on a largely unexplored market, one often burdened by societal stigma and a dearth of innovative solutions.

Challenges and Future Funding

This venture inherently carries a degree of risk. Many venture capital firms currently maintain clauses prohibiting investment in the “sex tech” sector.

Therefore, securing ongoing funding will be crucial for Blushh’s continued expansion and development. The startup’s ability to navigate this funding landscape will be a key indicator of its long-term success.

— Natasha

BrioHR

A recent report by TechCrunch detailed BrioHR’s successful closure of a $1.3 million funding round. The startup revealed during its pitch that it had achieved $13,000 in monthly recurring revenue (MRR), translating to an annual recurring revenue (ARR) of $156,000.

Focus on Southeast Asia

BrioHR is developing human resources software specifically tailored for businesses operating within Southeast Asia. The company identifies this region as underserved, characterized by legacy systems and inefficient operational workflows.

Their approach involves a dual focus. They are creating tools to streamline worker management and facilitate payroll processing. The payroll component necessitates significant localization efforts, leading to a phased rollout compared to other software features.

Growth Potential

Should Southeast Asia prove as receptive to modern HR solutions as the United States has, BrioHR is well-positioned for substantial expansion. It will be interesting to observe the company’s ability to increase its ARR following the recently secured funding.

— Alex

The company’s core offering centers around providing a modern alternative to existing HR practices. This is particularly relevant given the prevalence of outdated systems in the target market.

Localization is a key aspect of their strategy, especially concerning payroll functionalities. This deliberate approach ensures compliance with regional regulations and nuances.

The potential for growth is significant if BrioHR can effectively address the needs of businesses in Southeast Asia. Their recent funding round provides a strong foundation for scaling operations.

Charge Running: A New Approach to Virtual Fitness

The emergence of Charge Running can be seen as a natural progression following the success of Strava. This new startup, established by a former Navy SEAL alongside an expert in both app technology and kinesiology, provides live, interactive virtual running classes.

The company positions itself as a “Peloton for running,” emphasizing the importance of motivation and social interaction throughout the running experience.

Subscriber Base and Revenue

Charge Running has already secured a base of over 1,300 paying subscribers. These users contribute a monthly subscription fee of $30, generating approximately $39,000 in monthly recurring revenue for the company.

The app boasts a range of features designed to enhance the user experience.

• Group chats facilitate community building.
• A dedicated “running DJ” provides musical accompaniment.
• Comprehensive stats and notifications track progress.
• Tools are available for creating and hosting virtual live races.

The Rise of Outdoor Fitness

The recent pandemic has spurred a renewed interest in running as individuals seek outdoor exercise options. Strava, a popular running app, experienced significant growth in 2020, adding 2 million new users to its platform.

This surge in popularity suggests a market demand for apps that replicate the engaging social aspects of platforms like Peloton.

Charge Running is well-positioned to capitalize on this trend, as it eliminates the need for costly equipment – only running shoes are required.

— Natasha

ClipDrop

Achieving professional-looking product photography can be a significant challenge for small businesses, often necessitating the use of complex software like Photoshop and a considerable investment of time in manual background removal.

ClipDrop streamlines this process by leveraging the power of computer vision to automate background masking. Users simply capture a photograph using their smartphone or upload it to the desktop application.

The tool instantly identifies and removes the background, delivering a ready-to-use image suitable for integration into platforms like Photoshop or e-commerce websites.

Origins and Development

ClipDrop was developed by a team comprised of former Google employees. It initially gained traction as a viral research project.

Co-founder Cyril Diagne originally demonstrated the tool’s capability to facilitate “copy and paste” functionality between the physical world and digital environments.

These core algorithms have since been expanded into a comprehensive suite of tools available across multiple platforms.

Pricing and Revenue

Currently, ClipDrop operates on a subscription model, costing approximately $50 annually for unlimited image processing.

The company reports generating $24,000 in monthly recurring revenue, a figure achieved within five months of its initial launch.

— Greg

App Size Management with Emerge

The size of mobile applications frequently increases with ongoing development. The addition of new functionalities often necessitates the inclusion of more frameworks, a larger codebase, and increased debugging efforts, potentially reducing the time dedicated to optimizing download and update sizes.

Large updates can present challenges for users with restricted data plans or slower internet connections, leading to frustration and potentially negative app store reviews.

Emerge provides automated monitoring and analysis of iOS app sizes throughout the build process. It proactively identifies opportunities for size reduction, such as image optimization, removal of redundant files, and stripping unnecessary binary symbols, directly within each pull request.

While seemingly a subtle optimization, even modest reductions in app size, when aggregated across a substantial user base, can yield significant benefits. Noah Martin, the co-founder, previously dedicated five years to app size optimization at Airbnb.

The tool aims to streamline the process of keeping app downloads lean.

Key Features of Emerge

• Automated app size tracking.
• Build-to-build analysis for identifying size increases.
• Specific recommendations for size reduction.
• Integration directly into pull requests.

Reducing app size improves the user experience, particularly for those with limited resources. It also demonstrates a commitment to efficient development practices.

— Greg

Kodo: Expanding the Corporate Spend-Management Model to India

The rapid expansion of a successful concept into new global markets represents an efficient strategy for startup growth. Kodo aims to replicate the success of Brex within the Indian financial landscape. A key advantage for Kodo lies in the substantial size of the U.S. market for corporate spend-management solutions, allowing multiple companies – including Ramp, Airbase, and Divvy – to flourish.

The potential of the Indian market appears equally promising in terms of depth and opportunity.

According to Kodo co-founder Deepti Sanghi, the challenges that spurred the growth of Brex and similar companies in the United States are even more pronounced in India. This could potentially reduce Kodo’s customer acquisition costs and improve its overall financial viability.

Initial indicators suggest positive momentum, with the company projecting $10,000 in monthly revenue by March, alongside a gross transaction volume of $680,000 for the same period.

The appeal of Kodo’s U.S.-based counterparts has attracted significant investment from American investors. It remains to be seen whether Kodo can leverage this positive sentiment to continue its expansion and scale its product effectively within India.

— Alex

Key Takeaways

• Kodo is modeling its business after Brex, but focusing on the Indian market.
• The problems Kodo aims to solve are reportedly more significant in India than in the US.
• Early traction metrics are encouraging, showing growth in both revenue and transaction volume.
• Investor interest is high, driven by the success of similar companies in the United States.

Future Outlook

The success of Kodo will depend on its ability to navigate the unique challenges and opportunities presented by the Indian market. Successfully addressing these factors will be crucial for sustained growth and achieving its ambitious goals.

Alba Orbital

The market for satellite imagery is experiencing substantial growth and is becoming increasingly segmented. Specialized areas, such as hyperspectral imaging and the creation of highly precise elevation maps, are emerging. Alba Orbital is focusing on a relatively new niche, demonstrated by Planet’s success: frequent, orbital image capture.

While many companies aspiring to operate in orbit fail to achieve their goals, Alba Orbital has made significant progress. The company has successfully deployed six small, cube-shaped satellites into orbit.

This deployment serves as validation of their core concept – providing imagery of the Earth every 15 minutes.

The Value of High-Frequency Imaging

The need for 15-minute intervals, compared to the hourly or bi-hourly updates offered by Planet’s extensive constellation, might seem questionable in some applications. For instance, in agriculture, the difference may be negligible.

However, for critical applications like search and rescue operations, real-time traffic monitoring, and crowd assessment, timely data is paramount.

Cost-Effective Approach

Alba Orbital benefits from a relatively low Bill of Materials (BOM) cost of approximately $10,000 per satellite. Furthermore, decreasing launch costs, facilitated by increasingly frequent orbital launches, contribute to their viability.

These factors position Alba Orbital to potentially offer a competitive service alongside established providers like Planet and others in the satellite imagery market.

— Devin

Djamo

Achieving widespread financial inclusion presents a significant challenge in emerging economies. However, recent years have witnessed a surge in startups capitalizing on increased smartphone adoption, more affordable data plans, and advancements in fintech to tackle this issue.

These companies are not only establishing innovative businesses but also contributing to societal progress.

Djamo, originating from the Ivory Coast, represents a recent development in this trend. It is a challenger bank specifically designed for the French-speaking market within the region.

The company employs a strategy increasingly recognized in developed markets: reimagining conventional banking services – often considered commodities – with a more engaging and intuitive interface and expanded service offerings.

Access to these services is primarily facilitated through a smartphone application, a model that is now gaining momentum across the African continent.

Kuda, a Nigerian startup developing an English-language app, is another notable example experiencing rapid growth.

Djamo’s initial focus lies in providing a platform for managing pre-paid Visa cards and the funds loaded onto them.

The startup is specifically targeting a demographic that is both among the most financially underserved and the largest on the continent.

It is estimated that 141 million people identify as francophone Africans, yet only 25% have access to traditional bank accounts.

Successfully addressing this gap could position Djamo for substantial expansion.

The founders’ backgrounds suggest a promising future for the company.

CEO Hassan Bourgi previously established and sold a bus ticketing platform in Latin America to Naspers.

CTO Regis Bamba brings extensive experience from MTN, a leading telecommunications provider in the region, where he focused on developing mobile money services.

Further information about the founders can be found here.

– Ingrid