The emergence of API-first companies, in fintech and beyond – TechCrunch
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API first companies are nothing new, but I have been more aware of them since TechCrunch Disrupt 2021, where I moderated a panel discussion with Plaid CTO Jean-Denis Greze. Plaid is a fintech company, yes, but it’s not just in fintech that API solutions are on the rise – and helping to solve a wide range of problems. – Anna
Tracking API First Companies
I was trying to define API first boot, when I noticed it Alex already had. And since it’s not a simple achievement, I’m going to keep the same scope: What I’m talking about today is “any startup that either delivers its most important value proposition via an API – say Twilio – or is built to use APIs to facilitate a specific data transfer – AgentSync, etc. “
The definition above comes from a post on the index of API-first companies launched by GGV Capital, a multi-stage VC company whose areas of interest include “finding the most promising developers-first software companies that commercialize APIs.”
GGV’s dissertation on API-led startups already led the company to support Authing, Pinwheel, Mindee, Stream and Agora, the latter of which was listed in 2020. And outside GGV’s portfolio, API-focused Auth0 was acquired by Okta for as much as $ 6.5 billion. which gives the firm another reason to track other private companies using a similar approach.
GGV’s index sets aside expired companies and ranks the 50 API-led private companies that have collected the most financing. In the absence of an IPO, Stripe tops the list, while AI / ML startup Deepgram is the latest to make the cut, having raised around $ 56 million in funding to date. In total, says GGV, API’s first companies in their index have raised $ 12 billion in funding, including $ 5 billion in 2021 alone.
Beyond fintech
Approximately 40% of GGV’s API-First Index consists of fintech companies. There is a lot, but it also shows that there is room for developer-first companies in other areas. The promise to API companies, GGV wrote, is to “fundamentally simplify software development” – and there is no reason why this should be limited to banking or payment solutions.
You could also argue that fintech was very emblematic for the first wave of API companies, paving the way for a more diverse range of API-led startups. For example, former Plaid employees launched Stytch, an API-first password-free authentication platform that collected a $ 90 million Series B round last November.
“I understand why a16z says that every company is a fintech company, but I think there are other areas that need our attention,” Jorge Madrigal told TechCrunch. He and his co-founder Alex Hernandez are building Vivanta, an API-first company centered on health data.
