Y Combinator (YC) in the European startup ecosystem

Abstract

This paper analyses the impact of Y Combinator (YC), the world's best-known startup accelerator, on the funding success of European startups. While YC is widely credited with improving early -stage funding outcomes overall, its effectiveness in the European startup ecosystem remains largely unexplored. The study combined qualitative findings from 14 expert interviews with a quantitative analysis of 774 European startups. It compared the startups funded by YC with those funded by 27 leading European venture capital firms. Key dimensions analysed include the transition to Series A and Series B, sectoral outcomes, time between funding rounds and signalling effects. Contrary to prevailing assumptions, the results showed that YC-funded European start-ups were less likely to reach Series A compared to non-YC-funded companies. However, subgroups such as startups focussing on products for developer operations showed better results, indicating a possible sectoral fit. The qualitative findings highlighted the value of YC as a signalling mechanism, particularly for first-time founders and less experienced professionals, while also revealing concerns about inflated valuations and reduced relevance for companies with a local European customer base. The findings contribute to the literature by contextualising the role of global accelerators within local ecosystems and offer practical implications for founders, investors and policy makers concerned with funding strategies for startups.

Date of Award	2 Jul 2025
Original language	English
Awarding Institution	Universidade Católica Portuguesa
Supervisor	Peter V. Rajsingh (Supervisor)