Rise My Venture team recently heard the most exciting news for all Indian startups and entrepreneurs. Sam Altman, president of Y Combinator, has become one of the most influential voices in Silicon Valley since taking charge from the legendary computer programmer and entrepreneur Paul Graham last year. Branded a nerd king, who’s almost always spotted in a pair of shorts and hoodies, the 30-year-old is in the midst of bringing about sweeping changes at YC. Having birthed many billion-dollar babies, including the likes of Airbnb, Dropbox, Instacart and Stripe, the Valley’s startup machine is now looking to get more Indian ventures into its batches. Altman, who founded a location-based social networking app Loopt after dropping out of Stanford, sat down with a journalist for an exclusive chat at YC’s Mountain View, California office and spoke about India spawning multiple billion-dollar startups, his upcoming India visit, cash burn and valuations at tech firms. Excerpts from an extended interview.
You’d told me last year that you want to send a YC partner to India to meet founders and startups. Is that happening soon?
It’s actually going to be me visiting India later this year. The idea is to basically meet the best startups in the world and get them to the YC programme. India is one of the largest and fastest growing markets globally and that’s why we have been investing in Indian startups (Cleartax and Razorpay) over the last couple of years. I think there will be multiple $10 billion-plus companies which will be started in India in the next few years and, hopefully, we will get a shot at funding some of those.
YC as a fund has been actively looking to diversify itself after facing criticism for being very Valley-focused. How’re you pushing this strategy?
When I think about diversity it’s not just limited to funding more women or black founders because what we want is to fund the very best companies in the world and those are diverse in different ways. We fund not only software, enterprise, consumer and hardware ventures but also companies that build rockets and nuclear reactors, and a lot of high-tech startups.
This wasn’t the case about two years back. You were more consumer and enterprise centric.
Yes, it’s been happening over the past two years. Another way of approaching diversity is that we fund startups from India, China, and South America. Last year, we funded startups which had founders from 45-50 countries. This is really worldwide diversity. Two batches ago, we had 45 per cent founders who were born outside the US. We are funding more startups from Europe and Asia. And also from Central America and some African countries. These are solving local and global problems. The Indian startups from our batches, Cleartax and Razorpay, are focused on the domestic market.
Tell me as a fund where are you headed? Would you look to make growth-stage investments through the new fund which you are raising?
We simply want to fund a lot more companies. Currently, we do 115 companies per batch and that’s grown rapidly. Startups produce innovation and they are good for the world. If we can help more of these startups get going by funding them, it’s great for the world. I can’t comment on the new fund specifically but I do think growth stage is an interesting space. There are some companies which are looking to do very ambitious things which need a lot of capital. Helion and UPower are two nuclear ventures which we have funded and they need huge amounts of resources. In the biotech space, we have 20n, Transcriptic, and in the software category things like Airbnb, which are transforming communities, price of housing — they need more capital. It’s a valuable place to help our ecosystem. Theoretically and personally, it’s of interest to me.
I want to get you in on the macro environment: Do you think the tech market is overvalued?
Overvalued at some places and undervalued in others — here I’m speaking about US startups. Things are high for sure but let’s keep in mind that the interest rates here are zero so you should expect equities to be expensive. I’m still a buyer.
This article has been well researched by Rise My Venture team.