‘API Economy’ Gets a ‘Middleman’
The assertion that the "API economy" is upon us gained a measure of credence this week with a high-profile investment in a startup behind an open-source API platform designed to connect existing software for emerging applications.
San Francisco-based RapidAPI, a marketplace intended to allow developers to find application programming interfaces and manage them in one place, emerged from stealth mode on Monday (Nov. 21). It announced completion of an early investment round led by Andreessen Horowitz. Other participants in the $3.5 seed funding round included FundersClub, Green Bay Advisors and SV Angel.
The startup aims to serve as a "middleman" for connecting APIs from different companies, eliminating the requirement for developers to track the software interconnects. The service manages the backend plumbing associated with linking disparate code used for enterprise and other applications.
"The API is, quite simply, quickly becoming the interface for business," Martin Casado, a general partner at Andreessen Horowitz, stressed in a blog post. Casado was one of the founders of software-defined networking pioneer Nicira Networks, which was acquired by VMware (NYSE:VMW) in 2012 for $1.26 billion.
With the rise of micro-services, Casado noted the explosion of available APIs that serve as building blocks for new enterprise applications. However, "the growth of the function has so far greatly outpaced the industry’s ability to provide standard or unified methods of accessing them. The result, frankly, is a mess."
Startups such as RapidAPI aim to stitch together the soaring number of open-source APIs that lack a common data format. The marketplace serves a central repository for existing online APIs that streamline access and allows developers to integrate them with little or no additional recoding.
"Every API uses a different set of formats, standards and protocols — essentially a different language," added RapidAPI CEO and founder Iddo Gino. "This problem becomes even greater as more APIs are created and new formats are introduced."
The open source API platform claims more than 25,000 developers have used it to connect with more than 200 APIs. Enterprise customers include eBay (NASDAQ: EBAY) and Facebook (NASDAQ: FB).
With its platform transitioning out of beta testing, the startup said it is expanding it product team to connect more application developers with APIs. Leveraging open source APIs to connect developers to existing enterprise applications will allow them to add value on top of current data and functionality, Gino stressed in a separate blog post.
The seed funding reflects growing enterprise interest in new ways of managing APIs. For example, established application delivery startup Mulesoft has so far raised nearly $260 million in venture capital, including a $128 million funding round last year led by Salesforce.com (NYSE: CRM). The market valuation for San Francisco-based Mulesoft was recently pegged at $1.5 billion.
According to an industry estimate released last year, global companies are spending upwards of $600 billion annually to integrate and scale existing systems using APIs.