Y Combinator is following the money. In a shift from its origins, the storied Silicon Valley accelerator that backed Airbnb and Reddit is now funding more business-to-business (B2B) startups than consumer startups. They’re not alone. Enterprise investing, once a focus for specialized venture capitalists, has found its way into the portfolios of far more venture capitalists (VC).
Startup investors’ broadening B2B interest was on display at Y Combinator’s demo days from Aug. 21 to Aug. 22. Of the 124 startups in the summer 2017 batch, 41 were selling to large enterprises and business (a classification including fintech and government). That easily eclipsed the 25 consumer companies in this session’s class. After YC started in 2005, only 25% of YC portfolio companies were focused on the enterprise on average during the first five years. Since 2012, that average has risen to about 40%, according to YC.