Y Combinator “Sad” At Lack Of VR/AR Applicants, Calls For More

There’s a higher bar for late applicants, but Airbnb and Instacart both hurdled it.

Y Combinator “Sad” At Lack Of VR/AR Applicants, Calls For More
[Photo: Flickr user Kārlis Dambrāns]

Got an early-stage virtual reality or augmented reality startup, but missed last Thursday’s application deadline for the summer 2016 Y Combinator class? Don’t worry, YC really wants to hear from you.


In a tweet late Friday, Y Combinator president Sam Altman wrote that after reviewing the initial set of applications, he was “sad about the lack of VR/AR companies.” He added that, “If you’re doing this and want to apply late, email me!”

For those unfamiliar with it, Y Combinator is Silicon Valley’s most prestigious startup incubator. Every year, YC gets between 5,000 and 6,000 applicants for a class of what usually ends up being a little more than 100 startups. Each company, in addition to having access to a stellar roster of advisors and investors and A-list alumni like Airbnb, Stripe, Dropbox, Reddit, and many others, is given $120,000–in return for a 7% stake–with which to work.

In short, while there’s no guarantee that being part of YC leads to success, the companies that come out of the program unquestionably have a leg up on competitors, much like Stanford graduates do over those who come out of less-connected universities.

This year, of course, is virtual reality’s coming out party. Today, for example, Facebook-owned Oculus began delivering its highly anticipated Rift headset, and next month HTC will ship its just-as-breathlessly awaited Vive. Analysts predict that the VR industry will be worth $30 billion and augmented reality a $120 billion business by 2020.

That suggests there’s plenty of opportunity for companies looking to get a VR or AR startup off the ground. And that’s likely why Altman noted his disappointment at the lack of quality applicants in the space.

“One of the things we’ve noticed is that application cycles come in waves,” said YC spokesperson Justin Kan. “We had a lot of VR startups apply in the past. It might be the case that the super early adopters have all started VR companies [already] and applied to YC, and now we have to wait for there to be distribution of VR and AR devices for there to be another wave. From our perspective, it’s going to come.”


Certainly, then, now would be the time. That’s why, Kan added, “It’s a great time to start a VR or AR company [and] we just want to put that in people’s minds.”

YC alumni in the space include InsiteVR and Meta.

Perhaps one explanation for why YC didn’t see as many VR or AR applicants this time around is that, as Techcrunch writer Josh Constine noted on Twitter, the space may be “one vertical where specialty incubators have a strong foothold.”

If so, VR and AR companies will be flocking to places like Rothenberg Ventures’ River, a program aimed at “frontier technology companies.”

Kan acknowledged that specialty programs can offer a lot of specific domain expertise, but argued that Y Combinator in turn offers unmatched expertise in building a company, funding it, and growing it.

“YC’s still a no-brainer for companies” that want to grow, Kan said. “If I was a VR/AR company, I’d want to do YC.”


Higher Bar For Late Applicants

Altman’s call for late applications to the program is not all that unusual. Kan said YC founder and former president Paul Graham sometimes identified areas that he felt merited more applicants, such as companies working on Twitter apps.

In fact, he said, both Airbnb and Instacart were late applicants to the program.

Still, startups that apply on time get a more thorough vetting, Kan noted, and late applicants usually have to meet a higher bar in order to get in the program.

But one can imagine that, thanks to Altman’s public plea, those with VR and AR startups may well get a fair hearing.

“It’s not necessarily a good idea to start a startup because a YC partner put something out about it,” Kan said, “but it’s an interesting [area] we’d love to see more startups in, and [Altman’s tweet] lets them know we want to fund startups” in the space.


About the author

Daniel Terdiman is a San Francisco-based technology journalist with nearly 20 years of experience. A veteran of CNET and VentureBeat, Daniel has also written for Wired, The New York Times, Time, and many other publications