Unicorn factory Y Combinator bets on MedTech

Aug 31, 2021

Illustration: Mary Delaney

The unicorn factory

Last week, startup incubator Y Combinator unveiled the companies from its summer 2021 batch.

Y Combinator has incubated more unicorns (private companies valued at more than $1 billion) than any other early-stage investor. The semi-annual presentation of the program's new startups is therefore considered an important indicator of tech trends.

Y Combinator goes HealthTech

On the Y Combinator website, you can find a database of all startups. 59 of the 374 startups from the last batch tackle healthcare across all areas, from biotech to preventive health to drug discovery. This is 15% of the total batch, a clear upward trend compared to previous years. In our analysis, we found five trends particularly interesting:

The batch included seven medical device companies—more than ever before—although the funding volume for medical device startups has recently stagnated. The startups do not build simple consumer devices but are clearly positioned in critical medical fields like surgical robots (Revolve Surgical), respiration monitoring (Makani Science), and pelvic vein therapy (V-Flow Medical).
The mental health boom is also reflected in the Y Combinator batch, with startups in psychedelic therapeutics (Mindstate Design Labs), ADHD self-help (Inflow), online group therapies (Shimmer), and freelance marketplaces (Legion).
At MedTech Pulse, we have often written about the trend toward vertical telehealth offerings for specific target groups or indication areas. This is a trend that Y Combinator is also focusing on with Ruth (pregnancy), Verano (diabetes), and Comet (pelvic care).
Latin America has come into the focus of venture capital investors in recent years. LatAm startups have raised $9.3 billion in the first half of 2021 alone, almost double the amount of all of 2020. Y Combinator healthcare startups are also betting on the region, including Fitia (weight loss), FastPharma (digital pharmacy), Okani (primary healthcare), and Examedi (healthcare at home).