With $8.25M fund, Y Combinator backing even more startups

Y Combinator, the incubator whose graduates include Justin.tv, Reddit, Scribd, Xobni, and many other high-profile startups, just announced that it has raised a new $8.25 million fund.

Created in 2005, Y Combinator was initially funded by cofounders Paul Graham (pictured), Robert Morris, Jessica Livingston, and Trevor Blackwell. In March 2009, it raised a $2 million fund from Sequoia Capital and angel investors Ron Conway, Paul Buchheit, and Aydin Senkut. (Disclosure: Senkut is an investor in VentureBeat.) Those investors returned for the new fund, and they were joined by XG Ventures and Geoff Ralston.

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In its blog post announcing the news (published via Posterous, another Y Combinator company), Graham said the incubator plans to increase the amount of startups in each class. For example, there are already 35 startups on the roster for this summer, compared to 27 last winter.

Y Combinator has now funded 207 companies, Graham says. Startups in the program receive a small amount of funding ($20,000 or less) and participate in a three-month training program.