The top 5 consumer startups from Y Combinator Demo Day

MOUNTAIN VIEW, Calif. — The best and brightest of Silicon Valley crowded into the Computer History Museum today for Y Combinator’s demo day. Forty-nine of the tech scene’s most promising startups presented their businesses to the crowd with the hope of attracting investors’ attention and term sheets. The lobby swarmed with venture capitalists in expensive button-down shirts and loafers, scruffy entrepreneurs in T-shirts, and an assortment of celebrities, like Ashton Kutcher and Hall of Fame quarterback Joe Montana.

Y Combinator’s biannual demo days are the most highly anticipated pitch events of the year. The elite accelerator program reviews hundreds of applications to carefully select its classes, which are comprised of startups who are working, in the words of YC founder Paul Graham, to “make something people want.”

“It is getting harder for us to figure out who the big winners are because the quality of people applying is getting better,” Graham said during his introduction. “It is hard to pick winners, but that’s the nature of the business.”

Some of YC’s biggest wins, like AirBnB and Dropbox, are consumer companies. Roughly half of this class are consumer-facing businesses. Here are the top 5 consumer companies to present today.

7cups

Sometimes you just need someone to listen. 7cups is a Y Combinator startup that provides a platform to connect people who need emotional support with trained “active listeners.” Founder Glen Moriarty is a licensed psychologist. He said his goal is to bridge the gap between turning to friends and family for support and visiting a professional therapist.

“If you talk to family and friends, they might judge you or be unable to understand; they might not be the best listeners,” Moriarty said onstage. “But therapy is intimidating, expensive, and inconvenient. Most people don’t need full-on psychotherapy and a diagnosis, they just need someone to listen. This is the key insight our business is built on.”

People on the site connect anonymously with one of 7cups’ 160 trained active listeners. They have all gone through background checks and screenings, and rather than offering advice or treatment, they simply provide a compassionate, nonjudgmental recipient your woes. It launched 8 weeks ago and is now doing over 1,800 chats a week.

“Why should only therapists be able to help people in need?” said Ethan Kurzweil of Bessemer Venture Partners. “Lots of people are good at listening and should be able to share their listening skills with people in need.”

SpoonRocket

SpoonRocket has a simple and visceral pitch — $6 organic meals delivered in 10 minutes. The startup aims to be the “Uber of food” by bringing all elements of a food delivery business under one roof. The founders write code, cook meals that a few audience members described as “delicious,” and handle delivery. Founder Anson Taui said that bringing all the operations under one roof means SpoonRocket can offer a better, cheaper, faster delivery option.

“All delivery services suffer from the same problems,” Taui said during his presentation. “They are slow, expensive, and the food ends up tasting terrible. We control the whole process — we are Fast Food 2.0.”

Taui said that SpoonRocket launched seven weeks ago and is already experiences a $2 million run rate and 112 percent weekly revenue growth. The startup is delivering 850 meals per day, and it hasn’t even begun to expand outside of the S.F. area. Taui said they have the possibility to do $600 million annually and become a “money-making machine.”

Le Tote

Women commonly face this situation: a closet filled with clothes and nothing to wear. As one of those women, my ears perked up when I heard about Le Tote, which dubbed itself “the Netflix of women’s fashion.”

“Women want variety,” said founder Brett Northart on stage. “This solves that classic problem of never finding anything to wear by giving them an infinite wardrobe at a fraction of the cost.”

Le Tote already has backing from Andreessen Horowtiz, Google Ventures, and Lerer Ventures. It is pulling in $70,000 a month in revenue and growing 30 percent month over month, with a 93 percent retention rate. Every month a women receives a box with three garments and two accessories. They can keep them as long as they want. When they mail that box back, a new one comes in the mail. You can do this as many times a month as you want.

Rent the Runway is an successful startup that rents designer clothing for short periods of time, and startups like Birchbox have shown the popularity of subscription services that provide a continuous supply of variety. Furthermore, there is a trend toward “disownership” with the rise of the sharing economy. Tough economic times caused a shift (albeit small) in attitude about personal property, and consumers are interested in getting more for less.  Le Tote costs $49 a month. It sits at the intersection of a couple commerce trends and currently has a waitlist of thousands.

True Link

True Link wants to protect your grandma, or anyone else who is susceptible to credit card fraud, from getting scammed. Founder Kai Stinchcombe said that there is a $100 billion a year industry dedicated to confusing cognitively impaired seniors.

“It is not hard to confuse somebody with Alzheimers,” he said on stage. “Banks say that, just like a senior can no longer safely drive a car, they can no longer safely make their own payments. That is money she has saved her whole life. True Link is a safe form of payment for seniors.”

True Link acts as a backup mechanism to prevent accidental, inflated purchases. Its Visa cards are connected to credit or debit cards. Seniors can go about their daily life and spend money as normal. Whenever they swipe their True Link card, the transaction goes the company’s servers, which cross-referenced it with known scams to make sure it is a legitimate purchase. Certain types of transactions can’t go through without explicit consent, and the “fraud blocker” feature limits ATM withdrawals. True Link will also help protect against hidden fees.

The startup is focusing first on the 11 million seniors that suffer from some kind of cognitive impairment, but Stinchcombe said the opportunity is much bigger. It can extend to people who struggle with substance abuse or emotional problems, or anyone who wants to protect themselves from credit card fraud.

“There is no reason True Link can’t be on every credit card in the world,” Stinchcombe said.

Regalii

Immigrants sent a record-breaking $534 billion back to their home countries in 2012, according to World Bank estimates. This money, referred to as remittances, is a vital source of income for many families in the developing world. However, the process of sending and receiving this money is seriously broken, according to Regalli founder Edrizio De La Cruz.

“Ever since coming to this country, I have been sending money back home every single month so they can use it for food, bills, and medicine,” De La Cruz said while pitching. “Every time I send money, they have to pay for a bus, go to an agency, wait online for hours, or face the dangers of carrying cash in a really bad neighborhood, and Western Union taxes them 10 percent. Regalii is so hard-working immigrants can send credit to their family’s cellphones in Latin America that can be used instantly. This is the future of global remittances.”

Mobile payments is exploding. Research firm Gartner said that mobile payment transactions will reach $235.4 billion in 2013, a 44 percent increase from 2012. People in developing countries are buying mobile phones by the billions and they are commonly used to pay for daily expenses. Regalii is applying this momentum to remittance payments. It is starting with the Dominican Republic, but it will soon expand its service across Latin America. Ramyor said that $69 billion are paid in remittances to Latin America every year, and there are 40 million immigrants who send money back home every month. Regalii has signed contracts with 7,200 retailers in eight countries and will charge a flat fee of $3 for the service.

“We are a tech company built by immigrants, helping 40 million immigrants keep the lights on for locals back home,” De La Cruz said.