I'm not sure 8% is really indicative of any trend, also I think the sample size is way too small to draw any kind of conclusions. And no examples of what this 8

I'm not sure 8% is really indicative of any trend, also I think the sample size is way too small to draw any kind of conclusions. And no examples of what this 8% are up to, at least in broad terms? If you look at the bigger picture, rather than the little world of YC you'll see lots of hw in medical, aviation, military, communications etc etc. Saying that the number of companies that would be attracted to YC for money has risen from X to 8% doesn't really speak of any trend. There are some examples from kickstarter that spring to mind, like for example, Brydge (bluetooth keyboard/speakers for iPad) and the game controller world has its fair share of hw innovation (like Connect for example) but real hw innovation is out of reach of startups, you need chip fab plants and cross disciplinary skills that are expensive and locked up in the big company r&d departments. The real companies doing hw are not going to YC for money, they go to their boss.