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  • 🤑 12 March 2024: YCombinator Winter Batch + RAD Propulsion

🤑 12 March 2024: YCombinator Winter Batch + RAD Propulsion

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YC W24 BATCH

Invest in YCombinator W2024 Batch

We're thrilled to present one of the most exciting investment opportunities of the year: the eagerly anticipated YCombinator Winter batch has finally arrived!

To date, our partner fund has made investments in 14 YCombinator companies across three distinct batches. At The VC Insider, we're marking our second year of investing alongside this fund, and we are starting to see exceptional results.
Here's a glimpse into the remarkable progress of our YCombinator portfolio companies:

  • Kapital - The fund’s first YC investment recently closed its Series B round led by Tribe Capital alongside Tru Arrow, other VCs and family offices. They have grown from $5M to $70M in revenue within 2 years.

  • Revv - An investment from the YC W23 batch, recently received 5 term sheets for their series A. It quickly became one of the most competitive rounds in the year so far and the company has decided to partner with Left Lane for their Series A.

  • Tennr - Just closed their Series A round led by A16Z. Foundation Capital led the seed round and the current round has placed us at 5x+ MOIC. Tennr is also now closing its series A with A16Z. This will be a +5x markup on our initial investment on a little less than a year ago!

  • Fern - Has fully launched SDK language for Ruby, Typescrit, Python, and Go, continues to grow 20% MoM, and continues to close high-profile customers like Eleven Labs, Scorecard AI, BalkanID, Hume, and others.

  • Linc - Continues to close large customers including Signed Pacifica Trucking, BIA, Ally Logistics, and IPS Packaging and Logistics.

The YCombinator Winter 2023 Syndicate is already at ~2.11x MOIC in less than a year:

  • ~50% of the companies raised more capital at a higher valuation.

  • We invested alongside funds including Sequoia, Kleiner Perkins, General Catalyst, 1984 Ventures, Foundation Capital, and more.

What’s the plan for the upcoming YC W24 batch?

As we draw near to the much-anticipated YC Demo Day, scheduled for late March to early April, we're thrilled to present our subscribers with the opportunity to invest in the upcoming batch. The fund is actively engaging with founders, with plans to invest in 3-5 promising companies from the current cohort.

Fee structure?

4% management fees and 20% carry. The management fees include the Odin fees required to set up the SPVs.

How does it work?

In line with our approach for previous batches, we will implement a pledge structure for this batch. This means your capital commitment will be distributed across all selected deals. Hard commitments need to be in by March 15th.

Check out a few links highlighting what we have done and plan to do with the upcoming batch.


What’s the outlook on the current batch and valuations?

We’ve been investing in YC since 2016. Since then, the batch sizes have grown and valuations have followed. While there have been some concerns around valuation our goal is to invest in the best companies at a reasonable price. For the last batch the prices were a bit more reasonable given the market turmoils, issues going on with the banking system in the US (i.e. SVB) and more. However, for this batch, given high valuations we have decided to reduce the number of investments we usually do. We plan to only invest in companies we believe to have the potential for outsized returns. While investors pay a premium price for investing in YC there are advantages that YC gives that founders would otherwise not have access to:

1) Access to 4k+ companies that they can tap into for customer acquisition and partnerships.
2) Mentorship and guidance from experienced founders and operators.
3) Access to capital at the early stages from investors to help along the full growth curve.

This has been shown to help YC companies grow extremely well, to the point where 45% of YC companies go on to raise a series A. This is an opportunity to invest at the early stages of potential breakout companies.

We would love to have you as part of the journey as we look to source, invest, and support the best companies in the upcoming YC W24 batch.

- JA, the fund manager

Deal Stage: Pre-seed & seed
Minimum Capital Commitment: $10.000 (to be spread among 3-5 deals)
Fees: 4% fee + 20% carry
Deadlines: Hard commitments/pledges need to be in by March 15th

Unlike our usual modus operandi, for YCombinator any pledge submitted will be considered a hard commitment, which constitutes a legally binding obligation to invest. Upon submission, your details will be forwarded to the fund managers overseeing the YCombinator syndicate.

STARTUP PICKS

RAD Propulsion

Blurb: RAD Propulsion is a UK-based startup that is developing a range of smart, connected electric outboard motors for boats. The company will supply to the leisure, commercial, and defence sectors. The current core product is the RAD40, a replacement for traditional 40-60hp outboard motors that are typically used to power 5-12-meter vessels. The motor has a sleek design, is ultra-compact, and provides easy manoeuvrability. Its size is an attractive feature for boat builders as it provides them with great design flexibility and its high level of digital connectivity results in a Tesla-like experience for the boat user.

Since we invested in June 2023, RAD has done very well growing in revenue from £600k to £2.5M in sales last year. They are on target to hit £5-7M in sales by year end which we are very impressed with. With further traction and a close relationship with the founders, we have decided to partner again with the fund to re-up another small check into the company by the end of this tax year. We believe they are already at the product market fit stage and we only see the company ramping up from here.

Highlights:

We believe this is the best team in the market
  • Dan and Rich founded ASV Global in 2010 an unmanned marine robotics business. Successfully sold to L3 Technologies in 2018 for a $100M exit.

  • Dan Hook - 20 years of experience building and running companies in the marine industry.

  • Rich Daltry - 17 years of experience developing technology businesses in the maritime industry.

Fundraise

RAD propulsion is raising to focus on R&D and growth - note they have secured the majority of this capital already and we just have an opportunity to top up to £500k. This raise will give RAD a cash runway to 2025 and put them in a position to raise a competitive series A. This is an opportunity in a market with multiple exit options. The most likely exit route is a trade sale to a traditional outboard motor manufacturer, several of whom have expressed early interest in the company. Yamaha is one of the potential partners for RAD, with interesting ongoing conversations, and it's looking likely they will invest in RAD’s series A round.

Early indications of strong customer traction
  • RS Electric Boats – has received the first RAD 40 drives with a delivery schedule established for the rest of 2024.

  • Stephens Waring Yacht Design – has chosen to partner with RAD Propulsion on an exclusive project, producing a new 26-foot electric commuter boat, launching in Maine, USA, in Autumn 2024.

  • MSUBS – has ordered drives and batteries for its Oceanus boat to be launched later this year with further orders expected later this year.

  • Martec – new customer in the US who has ordered four drives.

  • Seavolt – RS Electric Pulse 63 order with RAD drive.

  • ZENOW Innovate project - this grant includes the supply of 23 RAD 40 drives along with four of our next-generation RAD 120 drives. The first drives have been delivered and all the RAD 40s will be ready by the end of Q2 with the RAD 120 to follow in Spring 2025.

  • Valkama – has ordered drives for its Picnic boat. Orders for both Finland, where Valkama is based, and the US.

Deal Stage: Pre Series A
Round Size: £5M
Pre-Money Valuation: £9M
Minimum Ticket: £5.000
Fees: 4% fee + 20% carry
Lead Investors: One Planet Capital
Co-Investors: Britbots, Vala Capital, High Growth Robotics, Oliver Plunkett, Anthony Clake, Ocean Affinity

This will be considered a soft commitment. Upon submission, your details will be forwarded to the fund managers overseeing the deal. They will then provide you with the deal memo, deal sheet, and all necessary information for you to thoroughly research this investment opportunity. Once you are satisfied, you can submit your hard commitment directly to the fund managers, who will then secure your participation in the deal.

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