If GGV CapitalIt reached out to me and told me that they had created an index of API first companies. I was intrigued. In recent years, venture-built indexes for startups and other companies have proven to be useful tools. Bessemer’s cloud indexThis is also now a tradable ETF on Nasdaq.
But what GGV had in mind was startup-focused, meaning that it was even more up TechCrunch’s alley than what Bessemer had cooked up, so I got on the phone with the investing group, Chelcie Taylor, Tiffany Luck and Jeff Richards, to talk it through. To start, though, let’s talk definitions.
What’s an API-first startup?
You will have your own definition of what an API-first, or API-led startup is. For our work today, it’s any startup that either delivers its main value proposition via an API — Twilio, say — or is built to use APIs to facilitate a particular data transference — AgentSync, etc. That’s about as simple as we can manage.
Before we parse what GGV has built to sit atop the API-led startup boom, such as it is, remember that the software market is slowly evolving past SaaS. Software as a service was itself a business-model shakeup for software, leading to nearly every startup selling code as a managed service instead of a single-sale product. But while SaaS has become the de facto model for startups today, there’s a growing push to offer software-delivered services via on-demand pricing. Or, what we might call “just what you need” pricing.
Twilio has shown that the model can prove popular, is for API-first startups akin to what Salesforce has proven for SaaS. Regardless, if the software market continues to pivot — slowly, mind — more towards on-demand pricing over traditional SaaS pricing, API-first startups could be on the right side of business-model history.
What’s GGV built?
There’s not a great number of public API-first companies, which means that useful data on the cohort is somewhat scarce. SaaS is a mature business model, which means that many companies are using it. Not that every API-first startup is not priced along SaaS lines, but there’s a loose pricing divide that means we can’t use SaaS metrics as a general comp for API-led startups.
And we wouldn’t want to, even if we could. According to Taylor and Luck, API-first startups have a different “type of DNA” than SaaS startups, as they are often built with a community-focus, and sell to developers instead of companies.
There is more to the difference between SaaS startups and API-first startup’s customer acquisition methods than just a stylistic one. API-first startup can reduce their internal sales footprint by getting developers on board, which will change the operating profile of the company from a financial perspective. GGV’s duo pointed out that API-first startups are more likely to succeed. WithTheir customers can be a source of efficient upsells due to their organically increasing usage.
We cannot rely on public data because there are not enough of them. GGV created a list of API-led private companies, which it plans to keep updated quarterly. Over time, more names will be added. The venture group started with about 30. The venture group then “ranked the companies based upon their total funding raised which we gathered from publicly available sources,” Taylor said.
Today the API-first listIt reads as a rough draft. However, it will eventually contain many more entries. TechCrunch hopes GGV will use its position as venture player to politely collect data from startups that are on its list. This would allow it to increase its data footprint and provide more metrics.
Why GGV, and not TechCrunch,? Zero startups are going to share their most recent quarter’s net dollar retention with us. Maybe with GGV. It would be great if it were anonymized. I would sacrifice a small animal for that data, frankly, so here’s hoping GGV can collect a broad dataset to share with the general public.
Today the list notes that the few dozen API-first companies that GGV is tracking have raised $12 billion as a group, with some $5 billion of that coming in 2021; sure, the entire venture market accelerated, but that’s still a pretty big chunk of the aggregate in the last year. GGV notes that 44% of its companies are fintech-focused. After reviewing our API startup digest, this number seems low, if at all.
A note on the sheer number of startups that we’re discussing. In preparation for this post, here are some notes. asked TwitterAPI-led businesses are encouraged to comment. It delivered.
People were raised in this way. Kong, Cohere, Contentful, Solo.io, BlueSnap, SpeechlyPlease see the following: Alpaca. Next, was Butler Labs, Alloy, Mux, Shippo, BesedoPlease see the following: AirspaceLink. Also, people are raised. Ascend, Anvil, Sydecar, Noyo, AgentSync, Synctera, TerraPlease see the following: Pinwheel. Then, there was Blended Edge, Herald, Merge, Inigo.io, Bannerbear, Abound, Remote, IntegryPlease see the following: Intrinio.
This is just a partial list. Dapi, RailsBank, Finch, Plug Pagamentos, Mono, SocurePlease see the following: Boost Insurance. Taking a breath, there’s also Unit, Pave, Lendflow, Sequoir, TravelTime, Fintoc, Palenca, BelvoPlease see the following: Cohesity. People have been kind enough to mention it PlaidI’ve heard about it, but there are also FireHydrant, Fabric, APIToolkit, Bankable, RapidAPI, SpinwheelPlease see the following: Bureau.
Some API-first companies have very good names. Metronome Sardine. But that doesn’t mean we should ignore Speechly, Seam, Daily, Liveblocks, Ayoconnect, Capsule, DeliverFaster, PrivyPlease see the following: Lob. There are also other options available on the market. PhloConnect, EditFrame, Conduit, Drivly, AtomicInvest, LogicLoopPlease see the following: Project44.
More names were also submitted: ZenPatient, Codat, Finoptimal, Bkper, Nylas, Standard Metrics, IdentityPass, Ribbon Health, Redox, Zus Health, Onna, ShotStackPlease see the following: Postman. Friends were also mentioned Simplifeye, healthR, Argyle, REWORTH, Workwhile, INVYOPlease see the following: Receptiviti. But we’d be remiss to not also mention Workload, Barikoi, Modern Treasury, Zenudo, Leap, WunderGraph, Check, Enode, Pandascrow, Deepgram, Clair, Güeno, Routefusion, Roboflow, Zeal, Climatiq, Blue Sky Analytics, Duffel, Warrant, Violet, Patch, Duplo, OkraPlease see the following: Salt Security.
I am out of segues, so here’s the rest of the list: Infura, Point One Navigation, Checkr, Medusa, Tray, Strapi, Rutter, Convictional, Bannerbear, Heron Data, Temporal, Aiculus, Stytch, Realize, Smartcar, Cloverly, Courier, Inscribe, Akita Software, Optic, Bump, KrakenD, Mistho, Trebelle, dLocal, EmployeeCycle, Lula, Celitech, Instant CommercePlease see the following: Xoba.
That’s a few companies. I share the full list of responses because it underscores how many startups we’re talking about. Note: We couldn’t find the homepage of some API startup names. This is something you should think about. If we have incorrectly capitalized your startup name tweet us.)
API-led startup: Why is it important? There are many reasons to care about API-led startups, aside from the fact more and moreTechCrunch has reached out to early-stage companies. This is because they care about tech and the models constituents. But more than that there’s a neat future out there if we can build it.
I am intrigued by the growth of low- and no-code services. Is it possible to combine a boom in API creation with no-code services. What is the time frame before I am able to build my apps with no-code tools? APIs allow you to access tons of useful information without the need for an IDE.
Your humble scribe won’t be around to create a future that is as bright and beautiful as the present. He or she will instead be busy mixing up death metal tour dates with food delivery volume in order to keep track of what heavy metal fans eat after their shows. It’s possible to create your own combinations.
We do have some data today on API-led startup. Here’s to more in time.