It’s that time of the year again: Y Combinator’s Winter 2020 Demo Day. We’ve attended this for the last couple of years, and this year was an entirely different experience in light of our current WFH situation brought about by Coronavirus.
Instead of having founders pitch on stage for a minute or two in front of a massive crowd, Demo Day is virtual and only takes the form of a single slide company summary, along with a few lines about the company and the team.
It’ll be interesting to see the impact of this new format on a female founder’s ability to fundraise. Our take?
This could be good news, because the format of the website means that the first thing investors see when they click to find out more about a startup is the success metrics, letting the data and the startup’s performance take center stage as opposed to the physical appearance – especially the gender and ethnicity – of the founder.
For industry-specific investors, this could be a more efficient process because you can sort and filter the startups by categories or geographic focus, as opposed to the original format where startups present at random in no particular order or category.
However, this format could be bad news, because it potentially reinforces bias.
An investor is human and will make lightning-fast decisions based on the information they have in front of them. While these quick decisions save time and energy, a knee-jerk reaction can mean your brain is taking short-cuts and relying on pattern recognition. This leads to decisions that are formed based on instinctive, emotional thinking and unconscious bias (for those wanting to delve deeper, refer to System 1 Thinking from Daniel Kahneman’s book, Thinking Fast & Slow).
When that’s combined with the added inability to expand on the slide with a live pitch, founders are left with this being the only opportunity to connect with investors.
This can be disastrous for a female or underrepresented founder. We already know the hurdles that exist around unconscious bias!
We would have liked to have seen more thought put into this aspect of the new format, and consider this a reasonably-sized design flaw, but understand that this was a feat to put together in two weeks.
From the founders’ mouths
We were fortunate to catch up with a few founders from this cohort.
According to Lisha Li, founder of Rosebud AI, “While it may be more efficient for investors to sift through slides, founders don’t get a chance to make an impression beyond text. Presenting helps us scale up the personal touch, so investors can get a sense of how we speak and engage.”
But she pointed to some obvious silver linings: since everyone is working remotely, it means that founders can get through many more meetings, which not only take a lot of back and forth to schedule, but also require a lot of commuting. Lisha recalls having 12 hours of back-to-back calls of 15 to 30 minute slots for two days after the demo day website went live – this level of efficiency is unheard of. Alyssa Atkins, founder of Lilia, shares the similar thoughts: she not only took twice as many meetings with investors than she would otherwise, but was still able to form deep connections right away with female VCs over video calls about egg freezing, an important problem that Lilia is tackling.
Avni Patel Thompson, founder of Modern Village – and a second-time YC founder – echoed Lisha’s feelings. While she would’ve loved to tell her story in front of an audience, she appreciated investors’ speedy decision making – some even signed handshake deals (thankfully virtual!) off of a 30-minute call. Overall, they were really impressed with how YC pulled this together in less than two weeks – in Lisha’s own words “A demo day for the history books!”
What do the numbers tell us?
Now back to the HARD stats (literally).
Our hopes were that there would be a steady increase in the percentage of companies with a female founder or cofounder (honestly, we would’ve taken a 0.1% increase).
Sadly, this was far from the case:
- Only 20.9% of the companies have a female founder – a 3% decrease from this time last year.
- 11.3% of the founders are women – 1% down from last year
- Only 6.6% of the whole batch is founded by a solo female founder or all female cofounders (compare this with 79.1% representing startups with a single male founder or all male founders).
See here for more diversity stats on the current batch.
There are still huge amounts of work to be done on the diversity front.
In the meantime, on a more positive note, here are some of our top picks from the women-founded companies in this Winter Batch!
Rosebud AI – Lisha Li (Founder)
Category: B2B, SaaS, Developer Tools, Machine Learning/AI, US/World
While the above models share the same outfit and hairstyle, one very important thing that they share is that they are not real. They are all generated by Rosebud AI, a synthetic media company founded by Lisha Li, which generates infinite human variations on a single photo or video.
How it works: using deep learning and generative adversarial methods, Rosebud AI allows users to edit and synthesize visual content (starting with human faces), removing the need for video/photoshoots and models. As a marketer, this is huge! The ability to use one photo and make variations of the people in the creative asset means we can cater to individual customers much better, instead of having to create a forcibly diverse cast to target everyone.
The results speak for the potential: their first campaigns saw a 22% lift in clickthrough rate. And let’s not forget the amount of money you can save from video and photoshoots, production and talent fees. For content creators out there, Rosebud AI is actually offering a free collection of 25k HiRes stock photos with customizable AI-synthesized people – give it a try!
Launched only three weeks ago, they already have five Fortune 500 clients paying for the service, which charges $1000 per photo processed. They are looking to charge $5000 per photo for unlimited variations. This may sound like a lot for one photo, but Fortune 500 companies can spend over $50K for a single photo and $1.5M for a video.
Fun fact about Lisha: She had a short film made about her, celebrating her mathematical prowess, called “Portrait of a Mathematician Lady” by French director Olivier Peyon.
Trustle – Elizabeth Adams (cofounder)
Category: Consumer, Education, Marketplace, Healthcare/Biotech, US/World
For parents out there, imagine having a child being a real ‘threenager’ (yes, this is a real term: Urban Dictionary defines this as ‘a 3 year-old spouting attitude like a spoiled teenager’). What can you do about that? Parents find themselves resorting to Google, where they’re faced with conflicting advice, or worse, taking on the trial and error method. The cofounders of Trustle saw this opportunity to build a parenting and child development expert that will help parents better navigate through the terrible twos, threenager and beyond with proven methods.
Trustle is a subscription based product that charges parents $50/month to get access to an expert via text or phone call. So far, they have over 100 paying subscribers, growing at 20% every week, at almost zero churn. With 11M families with young kids in the US, they’re seeing a $6.6 billion market opportunity.
Where are they getting the expertise from? There happens to be a heavily underutilized group of experts found in the 180K preschool teachers with a masters in child development who are being underpaid at around $35K per year. By connecting these experts with parents, Trustle is providing parents a platform to make sense of and take action on their child’s cognitive, social, emotional and behavioral development. Like the common phrase ‘it takes a village’, Trustle helps parents build their own village.
Fun fact: Elizabeth, Trustle’s Chief Clinical Officer, can be considered the MVP of their startup – with 15 years experience in clinical child psychology, she started giving parenting advice to her friends and saw how important a support system is for parents, and eventually turned it into a parenting coaching business.
Trustle is pretty much Elizabeth on steroids!
SINAI Technologies – Maria Fujihara (cofounder)
Categories: B2B, SaaS, US/World
Corporations are receiving more and more pressure to apply carbon pricing internally and mitigate carbon emissions due to strict policies and regulations (like the Paris Agreement), pressures from stakeholders and consumers, PR risks as well as financial opportunities of reducing carbon footprint.
SINAI is an enterprise analytics software that helps corporations monitor their carbon emissions in their production and value chain, and provides recommendations on where to minimise carbon emissions to reduce financial and environmental costs.
SINAI charges an annual subscription of $5000 per facility, offering unlimited seats, letting users access automated reporting, data consolidation and visualization. They estimate that on average each company has 50 facilities under management and with over 250K companies globally, there’s an addressable market of $63 billion. They already have 50 companies in the pipeline and two signed contracts, SINAI is surely going to make a positive dent in this space.
Genecis Bioindustries – Luna Yu (Founder)
Category: Healthcare/Biotech, Hardtech, US/World
Genecis Bio has developed a patented method that uses bacteria to create premium compostable plastics from cheap food waste. What’s more: while their plastic has similar properties to traditional oil based plastics, they can be composted within 30 days after use, and it can also be degraded in the ocean.
In just three months, they’ve secured $500K in purchase orders and $55M in LOIs from early adopters in the premium food packaging and biogas industries. They can create products from single use plastics, to packaging, medical products, textiles and many more. With sustainability being more and more top-of-mind, we’re confident and hopeful that we’ll see a Genecis Bio product on our supermarket shelves in no time.
Fun fact: The founder, Luna Yu, in typical serial entrepreneur style, first made her own bacteria out of rice cookers because she couldn’t afford expensive bioreactors or lab space!
Ditto – Jolena Ma and Jessica Ouyang (Founders)
Categories: Developer Tools, SaaS, B2B, US / World
Being a marketer, I can relate to the importance of good and succinct copy to describe a product.
The founders of Ditto thinks that copy is the most under-leveraged aspect of building product right now. While design is a key part of a product, many times bad copy has thrown me off a product, especially grammar mistakes or lack of clarity about how to use a product and what to get out of using it.
Crafting, editing and giving feedback on copy happens cross-functionally between teams such as legal, policy, marketing and more. While Jessica and Jolene were working at the likes of Google, Facebook and Asana, they saw how fragmented copy workflows wasted both time and money, so they built Ditto to let teams collaborate on copy from design to product with a central source of truth.
Launched only four weeks ago, they already boast users from Spotify, Zapier and Workday and 180+ companies sign up for demos.
Riya Collective – Arian Agrawal, Sarina Siddhanti (founders)
Category: E-commerce, Consumer, US/World
One of my friends recently attended an Indian wedding and had to buy Indian clothing just for that one occasion. Riya Collective would have been a much more affordable option for her.
For the cofounders of Riya Collective, they saw an opportunity in the hugely overlooked market for Indian clothing in North America, which boasts a $10B market size. It’s not just any marketplace to rent clothing – they’ve built in a data-driven sizing and styling algorithm that puts personalization at the heart of their product.
But this is just the starting point for Riya Collective. Once they have a strong database of interested buyers, they will expand into other ethnic goods, such as jewelry, home decor and more.
Fun fact: Their secret weapon to growing 400% in the past 3 months with no marketing spend is going straight to the brides who then tell their guests to use their platform – network effect, am I right?
Lilia – Alyssa Atkins (founder)
Category: Consumer, Healthcare/Biotech, US/World
Where do you start if you want to freeze your eggs? Lilia is an egg freezing concierge and is here to guide women through their fertility options and make data-driven and informed decisions on steps towards egg freezing. Services include researching your benefits coverage, getting cost estimates, fertility testing, submitting paperwork, booking the best clinics, setting the right expectations and risks.
What I like about Lilia is its emphasis on information – while it’s important to highlight the control over women’s own bodies and lives, it’s equally important to provide information and data around the success rate of egg freezing. Women who are freezing their eggs need to know that egg freezing is buying them a higher probability, but not a certainty.
Lilia charges $500 for their concierge service and gets $500 every time someone is placed in a fertility clinic. This means they are targeting an addressable market of $33B. More and more women are freezing their eggs, with the number growing at 25% every year.
See the photo below for a glimpse into Lilia’s founder, Alyssa’s Egg Freezing Celebration, which she claims to be the first ever in the world. “The way we think about egg freezing is a reaction to a problem. But when I froze my eggs, I felt this sense of power and freedom. This radical moment of self love and self care should be celebrated” says Alyssa. Let’s hope this will be first of many many celebrations.
Bamboo – Yanmo Omorogbe (cofounder)
Category: Fintech / B2B/ Consumer/ Africa/ Emerging Markets
The first online brokerage service for Africans and their asset managers to access US-listed stocks, ETFs and global securities. They already have over 2K investors on their platform and $1.6M traded in the last four and a half months and growing at 97% month-over-month.
Their business model: they make around 1% for every dollar invested, which makes it a $4B market.
There’s currently a perfect storm brewing for Bamboo for various reasons. First, Nigerian treasury bills have historically been the best investment in Africa, offering risk-free annual returns of 15-20%. But in recent years, the Nigerian government has cut interest rates to 7% (below inflation rate), so Nigerian investors are now looking for new investment opportunities outside of Africa. But opening a US brokerage account is no simple feat. Second, the drop in oil prices and the imminent devaluation of the Naira will see many Nigerians reaching for dollar investments. Third, with the current drop in the US stock market, many new investors see it as a good time to dabble.
I also wanted to highlight a few more noteworthy startups founded or cofounded by female founders, which touch on the new found needs that we experience and anticipate during coronavirus:
Modern Village – Avni Patel Thompson (Founder)
Modern Village calls itself your family’s Chief-of-Staff that proactively manages your coming week for you in an app, saving working parents over 10 hours per week. The app is a central source of all the family information, tasks and schedules, and manages childcare, babysitters, cleaners, groceries and sends daily briefings to every family member so the burden doesn’t fall on one person (and we all know who this is likely to be…).
Especially in our current situation where many children are off school for the next few weeks, many have gone from having one full time job to taking on ten jobs as a full time parent/teacher/babysitter/games maker/chef/cleaner…..the list goes on. For $30/month, this tool can help you manage the disruption to our lifestyle and help us navigate this otherwise overwhelming situation.
They’ve also added a section for Parenting through Coronavirus – a survival guide with prep lists, resources, meal and activity ideas and more.
Cadence – Melissa Du (cofounder)
Cadence lets you stay aligned with your team through quick, contextual online updates, as opposed to unproductive and oftentimes uninspiring status update meetings. Cadence promises to replace 50% of meetings and give back 5-7 hours of time per week per team member. This is particularly important for right now: Parents have much more on their already fully-loaded plate with household roles and responsibilities. The ability to cancel some non-essential, nice-to-have meetings during this time would be so valuable, freeing time for parents to care for their children.
Fun fact: did you know that 25M meetings are taken per day in the US and over 67% are considered unproductive?
Fun tip: For those who are still stuck in meetings, play the Conference Call Bingo.
Hideout – Danielle Sobel
Even before restaurants started pivoting towards takeout-only during this week to adapt to the Coronavirus outbreak, the cofounders of Hideout were already cooking up (pun intended) a portfolio of delivery-only restaurant brands.
They were inspired by the insight that 60% of restaurant orders by millennials were delivery or takeout and immediately saw that delivery had the power to change the future of food. Live for only three months, the team has already launched two concepts from one kitchen location – a Japanese Katsu sandwich concept and healthy organic bowls brand.
What’s their secret sauce? Their business model is 2.5x more profitable than traditional restaurants. But what about the taste? Danielle pretty much has an ultimate accolade in the culinary world, having been the corporate sous chef at Masa New York, which holds three Michelin stars, sous chef at Public (one star) and Chef at Sushi Azabu (one star).
If you’re based in LA, give their dishes a try – order here.
Mistro – Sarah Ahmad (Cofounder)
With what feels like half of the world moving to distributed and remote teams as a result of Coronavirus, Mistro has entered the market at a very opportune time as the first ever globally localized benefits platform.
They make it easy for companies with distributed teams to provide locally relevant benefits in over 200 countries. This includes new resources, such as home office equipment, high-speed wifi, learning and development, localized healthcare benefit programs, meal cards for teams to access local delivery services and takeout spots.
One feature that I particularly love is the birthday feature, where remote team members can be gifted meaningful and thoughtful gifts and gestures, like concert tickets, spa days or a voucher to their favorite dinner spot.
GIGI benefits – Sowmya Rao and Nandini Vishwanath (Founders)
I’m sure you’ve read over and over again this week how gig workers and contract workers are disproportionately affected by coronavirus given that they lack employment benefits.
GIGI solves this problem for the 150M Indian gig workers who don’t currently have employment benefits by offering them insurance, investments and saving accounts. Cofounder, Sowmya Rao, saw first hand that drivers lacked a safety net when she was leading Public Policy for Uber in South India.
How it works: Workers dedicate a portion of their paycheck to cover insurance, expenses and retirement.
Fun fact: Did you know that gig workers make up the largest population in India? And in the US, 55M people are gig workers – that’s 35% of the total US workforce.
Glimpse – Helena Merk (Cofounder)
Interestingly, Glimpse is the only startup out of this batch that specifically called out Coronavirus. It’s an app that aims to solve loneliness, a consequence that some of us are feeling as a result of very much needed social distancing.
How it works: Glimpse users can chat with friends through 2 minute long video chats.
The cofounders are seeing a shift in social media from one of sharing to engaging. Currently social media replaces conversations with a lot of passive scrolling. Glimpse, on the other hand, is built with social connection as its focus, designing a low-effort, but high-value platform that allows you to catch up with your friends in mere minutes. In just one week, they garnered over 700 users.
Here’s a funny and lighthearted thread between founder of Y Combinator, Paul Graham and founder of Revealed, Alan Klement, on what’s worth building during this climate.
I’m really interested to see a platform that’s user friendly enough for older people to use that lets them easily connect to younger and less at-risk people who can help them do a grocery run.
YC might go virtual for their Summer 2020 batch, which could actually be a good sign for a stronger female founder representation. Women, especially mothers, typically find it harder to justify uprooting themselves and moving to the Bay Area for three months far away from their family. Going virtual could encourage more female founders to apply. Let’s see.