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API-first firms 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 conversation 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 ideal vary of issues. — Anna
Monitoring API-first firms
I used to be going to take a stab at defining API-first startups, once I seen that Alex already had. And because it’s no straightforward feat, I’m going to maintain the identical scope: What I’m speaking about immediately is “any startup that both delivers its foremost 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 post on the index of API-first companies launched by GGV Capital, a multistage VC agency whose areas of curiosity embrace “discovering essentially the most promising developer-first software program firms 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 out of doors of GGV’s portfolio, API-focused Auth0 was acquired by Okta for a whopping $6.5 billion, giving the agency but one more reason to trace different non-public firms utilizing the same strategy.
GGV’s index leaves exited firms apart and ranks the 50 API-led non-public firms which have raised essentially 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 firms 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 firms. That’s loads, however it additionally exhibits that there’s room for developer-first firms in different areas. The promise of API firms, GGV wrote, is to “essentially simplify software program improvement” — and there’s no motive why this may be restricted to banking or fee options.
You would additionally argue that fintech was very emblematic of the primary wave of API firms, paving the way in which for a extra various vary of API-led startups. For example, former Plaid staff launched Stytch, an API-first passwordless authentication platform that raised a $90 million Series B round 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 TechCrunch. He and his co-founder Alex Hernandez are constructing Vivanta, an API-first firm centered on well being information.
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