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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 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 resolve an awesome vary of issues. — Anna
Monitoring API-first firms
I used to be going to take a stab at defining API-first startups, after I seen that Alex already had. And because it’s no simple feat, I’m going to maintain the identical scope: What I’m speaking about right this moment is “any startup that both delivers its essential worth proposition through an API — Twilio, say — or is constructed to make use of APIs to facilitate a specific information transference — AgentSync, and so forth.”
The definition above comes from a publish on the index of API-first firms 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 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 firms utilizing an identical method.
GGV’s index leaves exited firms apart and ranks the 50 API-led personal firms which have raised essentially the most funding. For lack of an IPO, Stripe tops the record, whereas AI/ML startup Deepgram is the final one to make the minimize, having raised some $56 million in funding so far. In whole, 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 so much, however it additionally reveals that there’s room for developer-first firms in different areas. The promise of API firms, GGV wrote, is to “essentially simplify software program growth” — and there’s no motive why this might be restricted to banking or fee options.
You could possibly additionally argue that fintech was very emblematic of the primary wave of API firms, paving the way in which 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.