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API-first corporations aren’t a brand new factor, however I’ve been paying extra consideration to them since Nob6 Disrupt 2021, the place I moderated a panel dialog with Plaid CTO Jean-Denis Greze. Plaid is a fintech firm, sure, nevertheless it’s not simply in fintech that API options are on the rise — and serving to remedy a fantastic 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 straightforward feat, I’m going to maintain the identical scope: What I’m speaking about in the present day is “any startup that both delivers its foremost worth proposition through an API — Twilio, say — or is constructed to make use of APIs to facilitate a selected knowledge transference — AgentSync, and many others.”
The definition above comes from a publish on the index of API-first corporations launched by GGV Capital, a multistage VC agency whose areas of curiosity embody “discovering probably 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 non-public corporations utilizing the same strategy.
GGV’s index leaves exited corporations apart and ranks the 50 API-led non-public corporations which have raised probably the most funding. For lack of an IPO, Stripe tops the listing, whereas AI/ML startup Deepgram is the final one to make the minimize, having raised some $56 million in funding to this point. In complete, 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 rather a lot, nevertheless it additionally exhibits that there’s room for developer-first corporations in different areas. The promise of API corporations, GGV wrote, is to “basically simplify software program growth” — and there’s no motive why this might be restricted to banking or cost options.
You would additionally argue that fintech was very emblematic of the primary wave of API corporations, paving the best way for a extra various vary of API-led startups. As an example, former Plaid workers launched Stytch, an API-first passwordless authentication platform that raised a $90 million Sequence B spherical final November.
“I get why a16z says that each firm is a fintech firm, however I believe that there are different areas that want our consideration,” Jorge Madrigal informed Nob6. He and his co-founder Alex Hernandez are constructing Vivanta, an API-first firm centered on well being knowledge.