Startups Are Moving From Bits to Atoms
In a Nutshell
**Startups are shifting from software to hard tech—robotics, defense, semiconductors, and infrastructure—now comprising 20% of recent YC batches versus 8% before, with median revenue growth jumping from $8K to $20K MRR.** AI is accelerating this by enabling faster iteration, while macro trends like SpaceX's success and visible conflicts are driving founders toward atoms. Experienced solo founders in their 30s-50s are surging to 18-19% of batches, leveraging agentic tools to build full-stack products that automate entire jobs at software-like speeds.
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Some of the most powerful founders lately are in their late 30s, 40s, or 50s, marking a resurgence of the experienced founder.
Founders can now wire up a new model and see things working that were broken just a month prior.
YC analyzed companies accepted in the last 18 months and identified two major trends. The number of hard tech companies has risen from 8% to 20% of the batch. The median revenue growth has accelerated: previously companies reached $8K MRR by batch end, but now the median is $20K MRR.
Hard tech companies are those that touch atoms rather than just bits. Robotics has grown from 1% to 6-7% of the batch. Industrial manufacturing, bringing production back to the US, has increased from 4% to 10%. Defense has risen from 1.5% to 5%. Semiconductor stack and photonics companies have grown from 1% to nearly 4%. Power infrastructure companies have increased from 1% to nearly 3%.
One in six founders in the current summer batch has a PhD, a higher rate than historically. Technical expertise is required for fields like silicon photonics.
AI models are accelerating scientific research, enabling startups to achieve breakthroughs earlier. Previously, hard tech was limited by supply chains and software engineering talent. Now, with codegen tools, companies like Anduril can move faster without needing thousands of top-tier engineers.
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