14 out of almost 200 startups in YC W26 hit $1 million ARR by Demo Day, according to Garry Tan. That’s the highest ever.

$1 million ARR by Demo Day is what an elite YC startup looks like in 2026. 

The Numbers, Straight from Garry

I look at tons of startups in every YC batch. Hitting $100k ARR used to mean you were one of the top companies. Not anymore. 

Yesterday, Garry Tan announced on X that YC W26 had the most companies ever hit $1 million ARR by Demo Day. When I asked him how many, he replied that 14 of them hit that milestone.

Just a couple of batches ago, almost no one would hit $1 million by Demo Day. Now, about 7 percent of YC startups do it. 

I nailed one myself! Yesterday, I wired for an awesome SaaS company in W26 that recently crossed $1M.

Why Are Companies Growing Faster?

AI. 

AI has made every aspect of running a company faster. You can code faster, contact leads faster, even raise money faster by having AI generate your deck.

Not wanting to be left behind, businesses are eagerly buying AI tools. When you’re selling into a market like that, you can hit $1 million faster.

What Does Average Look Like?

Of course, $1M ARR companies are far from typical.

From what I’m seeing, the average YC startup has ARR below $100,000. Most software companies have at least some paid customers, but they’re still early.

Even if you’re not one of the top companies in your batch right now, there’s hope!

Demo Day is just one day in a company’s life. Maybe you’re not one of the cool kids today. But you could be a huge success later!

Are the Rounds Open? 

For the top companies, you’d better get your check in before Demo Day. Demo Day was yesterday, so if you haven’t already nailed one of those $1M ARR companies, you’ll probably have to wait for next batch.

For average companies, I’m still seeing rounds open. 

Contact founders you’re interested in sooner rather than later. Meetings have already been going on for a week or more. You don’t want to miss the boat. 

What About the Prices?

The best YC companies are growing at ridiculous rates. But can you invest at a price that makes sense?

Occasionally, the answer is yes. These $1 million ARR startups typically come at valuations between $25 and 40 million.

I’m comfortable with the lower end of that range. But when you get closer to $40 million, I tap out. There just isn’t enough upside left.

Valuations go even higher. I saw prices of $50, 75, and even 100 million this batch!

Oddly, the companies with tons of revenue aren’t raising at the highest valuations. The highest prices I’ve seen in W26 were for deep tech companies.

There seems to be a bubble in deep tech right now. This may be because everyone’s afraid of the foundational models killing application companies. 

Wrap-Up

We can grouse about YC’s valuations. But where else can you find startups just a couple months old with $1 million ARR?

YC is still producing some of the best companies in tech. Choose carefully, and you could find yourself in the next Stripe. 

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