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API-first corporations aren’t a brand new factor, however I’ve been paying extra consideration to them since TechCrunch Disrupt 2021, the place I moderated a panel dialog with Plaid CTO Jean-Denis Greze. Plaid is a fintech firm, sure, however it’s not simply in fintech that API options are on the rise — and serving to clear up an important vary of issues. — Anna
Monitoring API-first corporations
I used to be going to take a stab at defining API-first startups, after I observed that Alex already had. And because it’s no simple feat, I’m going to maintain the identical scope: What I’m speaking about at this time is “any startup that both delivers its major worth proposition by way of an API — Twilio, say — or is constructed to make use of APIs to facilitate a specific information transference — AgentSync, and many others.”
The definition above comes from a submit on the index of API-first corporations launched by GGV Capital, a multistage VC agency whose areas of curiosity embody “discovering essentially the most promising developer-first software program corporations commercializing APIs.”
GGV’s thesis on API-led startups already led the agency to again Authing, Pinwheel, Mindee, Stream and Agora, the latter of which went public in 2020. And outdoors of GGV’s portfolio, API-focused Auth0 was acquired by Okta for a whopping $6.5 billion, giving the agency but another excuse to trace different personal corporations utilizing an identical strategy.
GGV’s index leaves exited corporations apart and ranks the 50 API-led personal corporations which have raised essentially the most funding. For lack of an IPO, Stripe tops the checklist, whereas AI/ML startup Deepgram is the final one to make the minimize, having raised some $56 million in funding up to now. In whole, GGV says, API-first corporations in its index have raised $12 billion in funding, together with $5 billion in 2021 alone.
About 40% of GGV’s API-First Index consists of fintech corporations. That’s loads, however it additionally reveals that there’s room for developer-first corporations in different areas. The promise of API corporations, GGV wrote, is to “basically simplify software program improvement” — and there’s no cause why this could be restricted to banking or cost options.
You possibly can additionally argue that fintech was very emblematic of the primary wave of API corporations, paving the best way for a extra numerous vary of API-led startups. As an example, former Plaid staff launched Stytch, an API-first passwordless authentication platform that raised a $90 million Collection B spherical final November.
“I get why a16z says that each firm is a fintech firm, however I feel that there are different areas that want our consideration,” Jorge Madrigal instructed TechCrunch. He and his co-founder Alex Hernandez are constructing Vivanta, an API-first firm centered on well being information.