A new generation of API-as-a-Product companies is among us. Which will be the next Twilio?
When talking about API-first companies, or the idea of API-as-a-product, it’s difficult not to keep harping on about Twilio. Used by more than 172,000 companies and with hundreds of millions of dollars raised in funding, Twilio is a juggernaut among API companies.
While Twilio may have been among the first of this breed, it definitely won’t be the last. In recent years, we’ve seen a surge in popularity and engagement with APIs. Plenty of organizations across sectors no longer view APIs as a “side project,” but as a core business.
Below we’ll be looking at a number of these new API-first companies. We’ll attempt to determine what (if anything) they have in common, and consider whether there’s another unicorn out there in the making right now.
It shouldn’t be surprising that cryptocurrency’s explosive growth has ushered in many companies, API-first and otherwise.
FalconX, for example, offers a digital asset trading platform and APIs that promise the best point-in-time prices in crypto. It seems like they’re doing something right, since they saw revenue growth of 350% between May and December last year and secured investment from American Express at the back end of 2020.
Likewise, the general public’s recent interest in the stock market has been on the up (insert GameStop joke here), and that’s been reflected in the API space too. Alpaca offers an API for stock trading…and, just maybe, building an app capable of going up against Robinhood.
It was announced early in 2021 that Visa’s acquisition of Plaid, a data-focused API FinTech company, would be called off after objections to the deal by the Department of Justice in late 2020. Plaid experienced massive growth in 2020 and, for now, pushes ahead independently.
An isolated case does not a trend make. Still, the Visa-Plaid story might concern similar “API as a product” companies banking (if you’ll excuse the pun) on an acquisition by a more traditional financial institution.
Meanwhile, there are companies like Treasury Prime and Modulr, which offer APIs for banking infrastructure and business payments respectively, working on ways to bridge the gaps between traditional banking and some of the exciting possibilities offered by FinTech.
You don’t need to look much further than TikTok, an app that has turned nobodies into top 40 artists and revived decades-old anthems, to be reminded that there’s still big money in music. Songclip has a robust API for discovering and integrating music snippets.
What makes this “API as a product” offering particularly exciting is that the company has already partnered with Universal Music Group, Sony Music, BMG, Warner Music Group, and others to provide an almost endless supply of tunes.
With two lines of code, Daily.co’s API enables developers to add webRTC video and audio calls to any site or app. Although it isn’t exactly trying to do for video what Songclip is doing for music, both these services both feel like “classic APIs” with their shared focus on empowerment and taking the hassle out of implementing certain features.
Once we’re actually allowed to attend events again, Vivenu will be right back to disrupt ticket selling with their powerful ticketing API. Despite the mute to live events that COVID–19 has caused, investors are clearly looking to the future here; Vivenu recently closed a $15 million Series A funding round.
SoLoMo (Social-Local-Mobile marketing) isn’t quite the buzzword du jour in the same way it was back in the early 2010s, but location remains important in the world of API products. It’s easy to see why, given that huge apps like Uber rely heavily on map APIs — Google’s, in their case — to power their services.
MazeMaps is a novel concept in this area, with APIs that allow the creation of indoor maps and wayfinding. The company is a great example of solving a problem that exists in very specific niches — shopping malls, hospitals, corporate campuses, and universities. It’s an area that hasn’t previously been addressed very successfully.
OpenCage is another API that’s coming at an existing problem from a new angle. The company offers a geocoding API that converts coordinates to named places and vice versa, which has already been adopted by some household names and car-for-hire companies.
Security and Privacy
On its homepage, Skyflow asks the question “what if privacy had an API?” It’s an interesting proposition, and one that we’ve covered on the blog recently too. Investors are eager to answer the call we well; Skyflow raised more than $17.5 million of investment for its “data privacy vault.”
There seems to be plenty of money to go around in the realm of security and data privacy. A comparable service called Evervault, which uses Evervault Cages to protect sensitive data, raised $3.2 million to focus on providing an API to build apps with privacy baked in from the ground up.
More API Products to Watch
Of course, other API-as-a-product companies making waves right now don’t fit neatly into categories like those above. Symbl.ai, for example, offers a suite of “contextual conversational intelligence” APIs that can do things like analyze natural human conversations. Think sentiment analysis on steroids…
There are also companies like ShipEngine, going up against the status quo offered by incumbents like ShipStation. Then again, given that ShipEngine’s APIs have already powered more than a billion multi-carrier shipments, they’re not exactly David to ShipStation’s Goliath.
Spruce offers an API that enables mortgage lenders and real estate companies to manage the title and closing process, with a tech-forward experience that remains secure and compliant.
Back in the world of messaging, Twilio competitor mGage was keeping their attention primarily on SMS and MMS while Twilio was busy expanding their offering. The logic behind this was, presumably, that almost all businesses still use SMS to some degree.
In this case, that laser-like focus paid off: Kaleyra just acquired the company for some $200 million in cash and Kaleyra common stock. Interestingly, some analysts attribute Twilio’s 65% revenue increase in Q4 of 2020 to the SMS revival.
It’s a nice reminder that, even if mGage doesn’t turn out to be “the next Twilio,” there’s always room for more than one big player in a particular space.
The Future Of API-First Companies
Having seen some of the other API-as-a-product companies out there, it’s clear that there’s plenty of growth potential. The big question of the day is this: do any of them have what it takes to be the next Twilio?
It’s worth remembering that Twilio started back in 2008. Iron Man and The Dark Knight were blowing up at the box office, and the iPhone 3G was Apple’s latest exciting offering. Whatsapp wouldn’t release until 2009, and the debut of iMessage was still three years away.
It’s also key to note that Twilio has since grown to encompass video, chatbots, and authentication despite its initial focus on SMS and voice calls. That willingness to pivot, or perhaps expand, their focus has been instrumental to its success.
Maybe a better question to ask about the future of API-first companies might be, “is there a space that’s as ripe for disruption as telephony?”
The answer is a resounding yes, with FinTech, media, and real estate jumping out as three obvious examples. It’s not surprising that many of the startups and companies mentioned above fall into those categories.
Browsing their websites, it’s astonishing how many times the same three words crop up: simplicity, efficiency, and empowerment.
It’s exciting to see the volume of API-first companies that we’re seeing, and it’s great to know they’re being built on these tenets of API development. Given the amount of investment into companies like these, we think it’s probably a case of when we’ll see another unicorn like Twilio rather than if.
As soon as we predict which one(s) it’ll be, perhaps we’ll be back with some stock market tips…
Source: Nordic APIs