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With additional reporting from Kia Kokalitcheva.
MOUNTAIN VIEW, Calif. — Investors and press flooded into the Computer History Museum this morning for Y Combinator’s demo day.
The incubator has proven to be an effective vehicle for selling the startup dream. Twice a year, batches of startups pitch their ideas to potential investors, who open their checkbooks in the hopes of funding the next Dropbox, Airbnb, or Stripe — all YC alumni.
This year, the audience may have noticed a few changes. The organization has a new president, Sam Altman, and more nonprofits and “tech for good” companies made it into the lineup than ever before.
Altman is also pushing for more women to apply to the program, particularly in light of YC founder Paul Graham’s comments about women in tech.
On the whole, however, don’t expect any sweeping changes at the nine-year-old startup development program. Plenty of developer tools, location analytics, and service-economy startups made a showing (“the Birchbox for Slovenia,” “the Homejoy for snacks”). But we reached out to investors and business execs in the audience, scoured our network, and consulted startup ranking service Mattermark to pick out the best in the bunch.
Note: None of these startups have completed their rounds, although some have started raising financing. We’ll be following up with a list of “tech for good” picks at YC shortly.
Rickshaw: The new service
Businesses often require deliveries to arrive in a matter of hours. Rather than relying on an overworked intern, companies can now rely on Rickshaw, a same-day local delivery service. The company was founded by Divya Bhat, formerly the director of Rentals at Trulia, and Gautam Jayaraman, a former engineer at Dropbox. At YC, the founders claimed to have generated revenue on day one, with Rickshaw experiencing 60 percent growth month-over-month. How is Rickshaw different from a traditional courier? The startup’s foot soldiers rent Zipcars for flexibility, and the system can process new orders as they come in — even after the Richshaw carrier has mapped out a route.
Kimono Labs: The developer tool
Kimono is the startup generating the most buzz in developer circles with its product that makes it easier for devs to access data from the unstructured web. Kimono has developed a point-and-click tool that can extract information from webpages that don’t have an API available. The goal is to ensure that devs won’t ever need to scrape the web again. One of the founders writes in a company blog post that it’s simple enough for his mom to use — she could even build an app to check ski conditions in Lake Tahoe.
Airhelp: The crowd favorite
Europe’s Airhelp was the crowd-pleaser at Y Combinator. It is addressing a huge customer pain. In a nutshell, the company helps air passengers get compensation from airlines when their flight has been cancelled, delayed, or overbooked. Most people don’t know that they may be eligible for hundreds of dollars in compensation in any of these events. Airhelp handles the claim on their behalf and takes a cut if it’s successful. But early excitement aside, investors we spoke with expressed some concerns about the long-term viability of the company.
TrueVault: The revenue generator
Companies dabbling in the health care sector may need to deal with HIPAA, the Health Insurance Portability and Accountability Act of 1996, which safeguards sensitive patient data. Building a HIPAA-compliant business is a painstaking and occasionally expensive process for many health app developers, but now they can use TrueVault to store data. According to the founders, HIPAA applies to “five times as many companies as have been set up since September 2013.” The company charges about $1,000 per month, which makes serving these 2 million companies a $24 billion annual market.
BatteryOS: The nerdy pick
If you charge a battery to 100 percent, it will rapidly degrade. But BatteryOS is building batteries that will let you charge them to capacity without degrading them over time. The company claims to have “four times higher lifecycle than when controlled by conventional methods.” We hear from investors that this is a huge potential revenue-generator if the largest hardware makers get on board as customers. The first implementation of this technology is a product called BatteryBox, which is a rechargeable lithium-ion battery pack that carries enough power (50 Whr) to run a MacBook Air and charge eight iPhones.
It wasn’t easy to narrow down our list to five. Honorable mentions: SendWithUs, Abacus, 42, Bellabeat, Airpair.
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