Is YC turning into a kind of fight club?

Since inception, Y Combinator has invested in thousands of startups, and more recently, even hundreds within a single batch. Given the accelerator’s growth, competitive tensions feel nearly inevitable.

Still, one has to wonder if there is a fundamental shift afoot. Whereas YC always backed companies that might at some point overlap, the outfit appeared to casting its net far and wide, bringing in different startups at different stages from different geographies — companies that used each other’s products and formed tight bonds through YC’s active alumni network.

Now, however, YC seems to be actively leaning into startups that are roughly the same age, operating in the same countries and targeting exactly the same opportunity with nearly identical business models. Indeed, while similar types of companies within a class had grown inescapable as YC’s class sizes have ballooned, a kind of sameness is more apparent than ever with its latest batch of 400 startups. In fact, it’s beginning to look like the plan here is to back as many nascent rival teams as possible — then let them duke it out.

Perhaps unsurprisingly, Y Combinator sees things differently. At least, asked about the many startups that would seem to compete from the outset, a spokeswoman for YC writes in an email: “These companies are not in the same groups and do not interact. Also, it is common for startups to pivot during the batch.”

In the meantime, we’ve rounded up some of the startups that seem to us to overlap — a lot — within its Winter 2022 batch.

TradeX and Better Opinions

Founded in the same year and same location, TradeX and Better Opinions have the same goal: give people a way to bet — and win — money on their predictions. The startups are building platforms where people can trade money while betting on whether or not an outcome will happen, from a movie launch to who the next president will be. There are more serious future events to bet on as well, such as climate change, inflation and whether omicron cases will rise or fall in a particular location.

The only clear difference between the two companies is that TradeX is targeting higher income Indians and Better Opinions is branding itself more around inclusivity and accessibility.

Firezone and Netmaker

As early as 2018, our own Romain Dillet was making his own VPN server using WireGuard, a faster and more secure alternative to existing VPN software. Firezone and Netmaker, both participants in this batch of Y Combinator startups, are open source VPNs built atop WireGuard. Netmaker claims it’s 15x faster than OpenVPN, a popular VPN software, while Firezone says it’s 4x faster. But speed isn’t everything — the competitor cohort-mates will have to battle it out to offer better customer service, firewall options and ease of use than the other. Both startups have a free plan and a paid plan for larger business teams, but neither company is sharing pricing for these paid plans, so we can’t compare their price points just yet.

Streak and Yodaa

Consider that Streak and Yodaa are both less than two years old, both based in Bangalore, and both trying to build banking businesses that cater to teenagers by both educating them on their spending and helping them to save. (Both also offer a gamified approach, wherein kids can earn coins for certain spending behaviors.) It’s fairly plain these two will be vying for the same customers, who probably won’t be using two different banking apps. (More here.)

Finku and Pina and Sribuu

All three of these companies are personal financial adviser startups that are based in Jakarta and have been founded in the last year or two. Yes, Indonesia is a big market, but also, come on.

Tradezi and Anfin

Tradezi is a months-old, Ho Chi Minh City, Vietnam-based startup that calls itself the “Robinhood for Southeast Asia.” What it does (or will do): offers free online trading accounts that allows users to invest in stocks, crypto and other alternative assets in one place. It sounds a lot like Anfin, which is a year-old, Ho Chi Minh City-based startup that’s building a digital brokerage in Vietnam connecting users to the stock market in “a simple and intuitive way.” Investors could sign up for both companies’ brokerage accounts, but would they?

Clupp and Momento

The insurance market, particularly for vehicles, is far from saturated in Latin America, with just 30% of cars and 10% of motorcycles covered, according to Clupp, an online insurance startup that was founded in 2021 and is based in Mexico City. Indeed, Clupp sees a big opportunity in providing more affordable insurance for low-risk drivers in Latin America. And so does Momento, which was also founded in 2021 and based in Mexico City and is also looking to insure the region’s drivers and motorcycle riders. The big difference (for now): Momento says it is working through the regulatory process to be a fully licensed insurance carrier; Clupp appears to be working with a fully licensed insurance carrier to offer its products (Mapfre for cars and HDI for motorcycles).

beU delivery and HeyFood

Before this year, YC hadn’t backed a food delivery startup in Africa. So it was a bit surprising to see two of this type of company — beU delivery and HeyFood — in a single batch.

We understand that YC is excited to back food delivery businesses after seeing DoorDash go public. These startups operate in far apart African markets — beU delivery in Ethiopia and HeyFood in Nigeria — but over time, they’ll expand into similar markets and compete for the same customers in their bids to become the region’s top delivery platform.

Dojah and Identity Pass

Both platforms, founded in 2021 and based in Lagos, play in the identity verification space. Dojah claims to be an “all-in-one know-your-customer (KYC) and identity verification platform for Africa,” while Identity Pass says its infrastructure makes it possible for digital businesses in Africa to “easily verify their customers within seconds.”

It’s easy to assume that the market is enormous for both players, but customers will have to choose one of two services or switch periodically depending on speed, level of insights they offer, who fights fraud better and price points.

Naturally, even startups with a different take may be jockeying for the space soon enough. As we have seen with fintech especially, all financial technology products go horizontal until they blur. This is why SoFi now features stock investing, Robinhood offers a debit card and so forth. Once you go through the work of bringing a consumer into the fold, you want them to sell them as many products as possible — so you keep adding.

That means that regardless of where this cohort is starting (some are robo advisers, some Robinhood clones, some neobanks, some insurtech, many are tackling carbon emissions), Y Combinator has invested money and energy into numerous companies that could find themselves competing with one another sooner rather than later. While they may form friendships and become one another’s customers, you can also easily foresee, in some markets, more battle royale than mere dustup.

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