Silicon Valley is losing its charm as more and more companies are moving north to San Francisco where they have better access to top entrepreneurs, according to a report by TechCrunch. As things stand, more and more companies who touted the exclusivity of ‘The Valley’ are now making their way up north to San Francisco. Y Combinator, a startup accelerator that invests in startups twice a year is also feeling the heat and is currently looking for a space in San Francisco to operate its accelerator, sources close to YCombinator told TechCrunch.
YCombinator was founded in 2005 and its roots are in Mountain View California. Initially, the company offered programs in Cambridge, Massachusetts and Mountain View. But in 2009, the company decided to focus completely on The Valley. In 2013 when more and more companies were busy establishing themselves in San Francisco, YC set a small office in the city to test waters in the city and that marked the beginning of its journey northwards.
Y Combinator’s move north is the latest in a series of changes that the accelerator has been trying to implement in its operations that would mark the new beginning for the accelerator. The accelerator is no longer going to give startups $120,000 for 7 percent equity and it would also help startups with $30,000 to help them get the business off the ground.
Y Combinator has been mentoring more and more startups in its classes but this year’s batch of nearly 200 startups is 50 percent larger than the group that graduated in spring 2018. To accommodate this large set of startups at YC Demo Days later this month, the accelerator has shifted its office to a new venue, SF’s Pier 48. The accelerator has also put a lid on its ‘Investor Days’ initiative which provided investors the opportunity to meet the startups who had just completed the accelerator program.
YCombinator is not the only one which is planning to move northwards. 500 Startups, a smaller yet still prolific accelerator, opened an office in SF the same year as Y Combinator, and in 2018, the nine-year-old program decided to permanently relocate to SF.
This is not something that has happened out of the blue. It started to gather steam in 2012 when Uber and Twitter-backed Benchmark opened an office in San Francisco’s mid-market neighborhood.
Speaking about the exodus, True Ventures co-founder Phil Black told TechCrunch, “When we first started, it was that it would be maybe 60-40 Peninsula to the city; it’s actually turned out to be 80-20 SF to The Valley.”
Y Combinator’s move highlights an increasingly adopted mantra that Silicon Valley is no longer the goldmine that it used to be as more and more companies are making their way to San Francisco. For the best deals and greatest access to entrepreneurs, San Francisco is leading the way for the time being but it remains to be seen how long this trend is going to last.