APIs — lightweight application interfaces that developers use both to integrate third-party services into their own apps, and to let their apps get used more easily by other developers — have become an essential, and fast-growing, building block of the tech world. Now, a startup that helps app builders find, use, pay for and track calls on those APIs is announcing a round of funding to tap into the opportunity.
RapidAPI — which currently offers a directory of some 8,000 APIs, up from only 200 18 months ago — has raised a $9 million round of funding, a Series A that it will be using to expand its business to covering more APIs and more developers.
The funding is being led by Andreessen Horowitz, the same VC that had led RapidAPI’s seed round of $3.5 million a year and a half ago, with participation also from SV Angel, Green Bay Capital and Tony Jamous, the co-founder and CEO of Nexmo (the Vonage API Platform).
Andreessen Horowitz is well known for how it has doubled down on both enterprise startups and software as two key growth areas at the moment.
RapidAPI covers both of those bases, and has been in the midst of a significant growth spurt, too. The company today works with around half a million developers, up from only 30,000 18 months ago (a chunk of which came by way of its Mashape acquisition). It has more recently also been expanding into enterprise, where large companies like Cisco and Hyatt (the hotel giant) are using RapidAPI to power how they use both APIs from outside their companies and also internally.
RapidAPI says it processes some 400 billion API calls each month. Its directory includes APIs from Microsoft, Stripe, SendGrid, Slack, Foursquare, Eventbrite, Yelp, Google Translate, Spotify, NASA, ProductHunt and more. Currently, the most popular category is communications (think email and SMS) which is in almost every app today. AI-based APIs is the fastest-growing category — specifically around areas like facial recognition and text analysis.
Hailing originally out of Haifa, Israel but now based out of San Francisco (with offices in Israel and Kiev, Ukraine), RapidAPI was co-founded and now led by Iddo Gino (pictured). The young developer (he is now 20) says he came up with the idea when he was a student. Attending a lot of hackathons, he realised that there wasn’t a very efficient way to discover and use the wider range of APIs that are available when you need to code something quickly.
“You can’t build everything from scratch, and using APIs makes work a lot more efficient,” he said. “But each API has a different format and authentication strategy. You have to speak a lot of different languages to use them all.”
So he and co-founder Mickey Haslavsky (now the GM) built the first version of RapidAPI to address this specific pain point. The first version was essentially a wrapper around a set of APIs that created a standardised gateway to access them.
“We put that on Github, and were surprised to see that after a few months, we had 5,000 developers using that.”
RapidAPI’s rapid expansion mirrors the the rise of APIs themselves. There are now some 25,000 APIs in existence, versus around 800 only 10 years ago, and developers on average use between 10 and 15 per app. APIs have quickly become an essential building block them, both for quick and easy access to services within their own apps, and for making sure their own apps get used by others. The “API-powered economy” — that is, apps whose operation rests on using APIs — have been forecast to generate $2.2 trillion in the next 10 years.
On the subject of revenues, at this point RapidAPI isn’t making very many of these. The company, Gino says, takes a one percent cut on each API call made on its platform, with the prices for each call varying by business. Incrementally, there is very little to be made here, but in scale, the business is potentially very big longer term. Today, Gino says only that revenues are “in the millions.”
That, for now, plus the strength of the founders and how they have developed their ideas so far, have all added up to enough of an indication for how well this business could play out, said Martin Casado, the Andreessen partner who is joining RapidAPI’s board with this investment.
“RapidAPI has by far become the number one marketplace in the world for APIs,” Casado said in an interview. “Growth has been phenomenal. We started with a compelling founder, went to an interesting proposition, to ‘what next?'”
APIs, of course, also have their problems.
Being the property of the company that created them, many a developer has had the rug pulled out from under him/her when the company that has built the API decides to reign it in, or change the terms of usage. Some might argue that the only way to build an app is with resilience and no fundamental reliance on third party services.
Then there is the issue of how to grapple with the ever-growing jungle of APIs out there. How best to find the right one, and how do companies make sure their services get discovered? (In fact, a lot of the mechanics of API discovery and usage, mirrors that of the apps that developers build on top of them.)
RapidAPI potentially could help in both of these areas: it presents a number of options of APIs that can serve a similar purpose — meaning users who might lose one can easily find an alternative — and its marketplace can help with discovery.
For now, Gino tells me that APIs are “upvoted” based on usage: those that are most popular come up first. However, you can imagine how RapidAPI might put in more discovery mechanisms over time to tweak and hone that.
“Rapid brings order to the chaos of APIs out there,” Casado said.
There are a number of other directories out there that stand as potential competitors to RapidAPI, too. They include the likes of Zapier and IFTTT (also backed by Andreessen) — although these have less of a developer focus, Gino argues. Also, ProgrammableWeb has had a longstanding API directory, which it claims to be the world’s biggest, although it incorporates less of the tools that RapidAPI offers to use these through a single gateway.
There are also a number of companies today that you could imagine will want to get more involved in this space as they build out their businesses — from developer focused platforms like Microsoft’s Azure and Amazon’s AWS, through to companies like Stripe, itself built on its payment API but rapidly expanding to a plethora of easy-to-integrate business services. (Gino, incidentally, calls Stripe and the Collison brother co-founders, his “inspiration.”)
The bigger picture, when you consider all of these players and the growth of apps and APIs, is that opportunity is calling, and we’re still potentially only at the beginning of figuring out the best way to answer.