Now, for the first time in its nine-year history, the accelerator program is actively recruiting health-technology startups. To attract top talent in healthcare and biotech, Y Combinator recently tapped medical executive Elizabeth Iorns as a part-time partner.
Sam Altman, Y Combinator’s president, told Reuters he expects to see a growing number of venture capitalists investing in early-stage biotech and digital health companies.
“When we move into a new area, the venture capitalists usually don’t like it,” he said. “It takes them a couple years to come around.”
But increasingly, Silicon Valley is opening its checkbook to health startups. Digital health, a particularly trendy area that includes wearable technology and electronic health records, received $1.9 billion in 2013, a 39 percent jump from the previous year, according to data collected by venture fund Rock Health.
Y Combinator’s interest in health-tech echoes some of the largest technology firms – Google, Apple and Samsung. Similarly to these firms, Y Combinator is hoping to corner a sliver of the American healthcare market, which accounts for an estimated 20 percent of U.S. gross domestic product.
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“It’s the right time for us to try health care,” Altman said, as the “cost and cycle time” have dramatically decreased in recent years.
About a dozen health startups showcased their products and services to a roomful of press and venture capitalists at Y Combinator’s demo day. This marked the largest number of health-related startups in Y Combinator’s history, Altman said. The companies that presented on Tuesday included The Immunity Project, which is developing an HIV vaccine, and Boston-based Gingko Bioworks, which is working on a project to treat antibiotic-resistant germs.
Other digital health funds, including Rock Health, say they hope Y Combinator’s interest in the space will open the floodgates to new sources of funding.
Y Combinator offers funding and advice, in exchange for about 6 percent of each startup’s equity. It was founded by Paul Graham, a notable programmer and venture capitalist. (Reuters)
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